Office Properties Income Trust (NASDAQ: OPI) Retires Debt with 2.5 Million Common Shares Exchange
Office Properties Income Trust (OPI) recently completed a series of private exchange agreements, issuing over 2.5 million common shares to retire a portion of its existing debt. These transactions took place between August 1, 2024, and September 16, 2024, with OPI exchanging shares for $6.8 million in its 4.500% Senior Notes due in 2025.
The newly issued common shares had an average implied value of approximately $2.19 per share based on the principal amount of the notes exchanged and accrued interest up to the date of each exchange. OPI completed these transactions under Section 3(a)(9) of the Securities Act of 1933, allowing for the issuance of securities in certain exchange transactions without registration.
Following these transactions, OPI reported a total of 53,344,617 outstanding common shares as of September 16, 2024. The company also reported a reduction in total debt and a stable property portfolio in the second quarter of 2024, with a successful $1.3 billion secured financing and a decrease in debt by nearly $300 million.
Despite expected decreases in normalized FFO and same property cash basis NOI in the upcoming third quarter, OPI remains optimistic. The company's portfolio comprises 151 properties generating $483 million in annualized revenue. OPI plans to sell 12 unencumbered properties for $93.5 million and is working with Moelis & Company to address the upcoming maturity of $499 million of senior unsecured notes due in February 2025.
Analyzing OPI's financial metrics, the company's market capitalization is $114.82 million, trading at a low Price / Book multiple of 0.09 and a Price / Earnings (P/E) ratio of 8. This suggests that the market may be undervaluing the company's assets relative to its share price and that the stock could be attractively priced relative to its earnings.
Investors should consider OPI's expected net income growth this year and its commitment to dividend payments for 16 consecutive years. Additional InvestingPro Tips are available for a deeper dive into Office Properties Income Trust for more nuanced investment guidance.