Office Properties Income Trust Ratings Placed On Watch Negative On Planned Acquisition Of Diversified Healthcare Trust

Newton, Mass.-based Office Properties Income Trust (OPI) announced it has entered into a definitive agreement to acquire Diversified Healthcare Trust (DHC) in an all-share transaction. Therefore, we placed all of our ratings on the company, including our 'BB' issuer credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects that, while we expect the transaction to enhance OPI's scale and diversification, the combined company's financial policy, capital structure, and liquidity position remain uncertain. TORONTO (S&P Global Ratings) April 11, 2023--S&P Global Ratings today took the rating actions listed above. We expect to revolve the CreditWatch once OPI closes the acquisition, which we expect will occur in the third quarter of 2023, and we gain more clarity around the combined

...April 11, 2023 - Newton, Mass.-based Office Properties Income Trust (OPI) announced it has entered into a definitive agreement to acquire Diversified Healthcare Trust (DHC) in an all-share transaction. - Therefore, we placed all of our ratings on the company, including our '##' issuer credit rating, on CreditWatch with negative implications. - The CreditWatch placement reflects that, while we expect the transaction to enhance OPI's scale and diversification, the combined company's financial policy, capital structure, and liquidity position remain uncertain. TORONTO (S&P Global Ratings) April 11, 2023--S&P Global Ratings today took the rating actions listed above. We expect the company's key credit metrics will weaken following the close of the transaction. As of Dec. 31, 2022, OPI's S&P Global Ratings-adjusted debt to EBITDA was 7.5x and its fixed-charge coverage (FCC) ratio was 3.0x, which compares with 15.9x and 0.7x, respectively, for DHC. Therefore, immediately following the close of...

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