Research Update: Office Properties Income Trust Downgraded To 'CC' From 'CCC' On Proposed Debt Exchange Offer, Outlook Negative

Office Properties Income Trust (OPI) has announced that it is actively negotiating with its existing debtholders to exchange four series of its currently outstanding senior unsecured notes (worth $1.7 billion at face value) for up to $610 million of new senior secured notes and related guarantees, with priority given to the 2025 noteholders ($650 million outstanding). The exchange would result in debtholders receiving below the par value of the existing notes. We view the proposed transaction as a distressed exchange because the investors would receive less than they were originally promised. If completed, we would treat this transaction as tantamount to a default. We lowered our issuer credit rating on OPI to 'CC' from 'CCC' and our issue-level ratings on

...- Office Properties Income Trust (OPI) has announced that it is actively negotiating with its existing debtholders to exchange four series of its currently outstanding senior unsecured notes (worth $1.7 billion at face value) for up to $610 million of new senior secured notes and related guarantees, with priority given to the 2025 noteholders ($650 million outstanding). The exchange would result in debtholders receiving below the par value of the existing notes. - We view the proposed transaction as a distressed exchange because the investors would receive less than they were originally promised. If completed, we would treat this transaction as tantamount to a default. - We lowered our issuer credit rating on OPI to '##' from '###' and our issue-level ratings on its senior unsecured notes due 2025, 2026, 2027 and 2031, which are part of the proposed exchange, to '##' from '###'. - At the same time, we affirmed our '###' issue-level rating on the company's senior unsecured notes due 2050,...

Research Update