Office Properties Income Trust emerges from chapter 11 bankruptcy with $420 million secured notes and new capital structure
Office Properties Income Trust emerged from chapter 11 bankruptcy on June 17, 2026, issuing $420 million of 10.000% Senior Secured Notes due 2031 and $385 million of 8.375% Senior Secured Notes due 2029 to settle allowed claims. The company cancelled all pre-reorganization common shares (73,943,439 shares outstanding) and issued 21,953,577 new common shares plus warrants to creditors. A five-member board was elected, including three seats designated by investors (Helix Partners and Redwood Capital), with RMR retaining its management role under amended agreements.
Key facts
- 2029 Secured Exit Notes: $420 million principal amount at 10.000% per annum, maturing June 17, 2031
- New 2027 Senior Secured Notes: $385 million principal amount at 8.375% per annum, maturing December 31, 2029 (with $50 million in Deferred Payments)
- 21,953,577 Reorganized Common Equity shares issued on Effective Date
- New Warrants exercisable for 5.0% of Reorganized Common Equity, exercise price $25.00 per share, seven-year exercise period
- All 73,943,439 Old Common Shares cancelled with no distribution to holders
- RMR receives 2% Initial Equity Compensation plus up to 8% Subsequent Equity Compensation based on financial metrics
- Annual business management fee: $14 million for first two years; property management 3% of rents and 5% construction supervision
- Board composition: Jonathan Heller (Helix Partners), Jonathan Kolatch (Redwood Capital), William Lamkin, Adam Portnoy (RMR), Irvin Schlussel (unsecured creditors)
- Section 382 ownership change occurred; COD income reduced NOLs and asset basis; status as 'domestically controlled' REIT preserved
- Holders of allowed claims in Old September 2029 Senior Secured Notes and DIP Claims hold approximately 67% of Reorganized Common Equity
Why it matters
The company's emergence from bankruptcy with significantly reduced debt and new ownership marks a critical recapitalization that substantially improves its capital structure and liquidity position, though the Section 382 limitations on use of NOLs and the substantial NUBIL may constrain tax attributes and require higher cash distributions to maintain REIT status.
Developing story
- NT 10-Q
- 8-Kthis filing
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Derived from 8-K filed 2026-06-23. Not investment advice. View the source filing on SEC.gov →