v3.25.1
Indebtedness
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
Our principal debt obligations as of March 31, 2025 were: (1) $325,000 of outstanding borrowings under our $325,000 secured revolving credit facility; (2) $100,000 outstanding principal amount under our secured term loan; (3) $1,834,098 aggregate outstanding principal amount of senior notes and (4) $177,320 aggregate outstanding principal amount of mortgage notes.
Our $325,000 secured revolving credit facility and $100,000 secured term loan are governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders. As collateral for all loans and other obligations under our credit agreement, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 19 properties that had a gross book value of
real estate assets of $1,031,523 as of March 31, 2025. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayments on borrowings under our credit agreement are due until maturity. The maturity date of our credit agreement is January 29, 2027 and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the stated maturity date of our revolving credit facility by one year. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios, restrict our ability to incur additional debt in excess of calculated amounts and, subject to limited exceptions, restrict our ability to increase our distribution rate above the current level of $0.01 per common share per quarter and enter into share repurchases. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the 19 collateral properties, our satisfying certain financial covenants and other credit facility conditions.
Interest payable on borrowings under our credit agreement is at a rate of the secured overnight financing rate, or SOFR, plus a margin of 350 basis points. We are also required to pay an unused facility fee on the amount of total lending commitments of 25 to 35 basis points per annum based on amounts outstanding. As of March 31, 2025 and April 29, 2025, our $325,000 revolving credit facility was fully drawn and $100,000 was outstanding under our term loan. As of March 31, 2025, the annual interest rate payable on borrowings under our credit agreement was 7.9%. The weighted average annual interest rate for borrowings under our credit agreement for the three months ended March 31, 2025 and 2024 was 7.9% and 8.5%, respectively.
Our credit agreement and senior notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business and property manager. Our credit agreement and senior notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to increase our distribution rate above the current level of $0.01 per common share per quarter. As of March 31, 2025, our ratio of secured debt to adjusted total assets was above the maximum level under our revolving credit facility and our senior notes indentures and their supplements, and as a result, we are unable to incur additional secured debt unless this ratio is at or below the required level on a pro forma basis as a result of any contemplated secured debt transaction. As of March 31, 2025, we believe we were in compliance with all of the other terms and conditions of our respective covenants under our credit agreement and our senior notes indentures and their supplements.
Senior Notes Redemptions
In January 2025, we redeemed, at par plus accrued interest, all of the remaining $171,586 of our 4.50% senior unsecured notes due 2025.
In February 2025, in connection with the sale of a collateral property, we redeemed, at par plus accrued interest, $5,469 of our senior secured notes due 2027. As a result, we recorded a loss on early extinguishment of debt of $928 during the three months ended March 31, 2025, which represented the unamortized discounts and issuance costs related to these notes.

Senior Notes Exchange
In March 2025, we exchanged $14,439 of new 8.00% senior priority guaranteed unsecured notes, or the New 2030 Notes, for an aggregate $20,990 of our outstanding unsecured senior notes, or the Existing Notes, and such transaction, the Senior Note Exchange, as follows:
Existing Notes ExchangedAggregate Principal Amount of Existing Notes Accepted for ExchangeAggregate Principal Amount of New Notes Delivered
Existing 2.650% 2026 Notes
$6,559 $5,836 
Existing 2.400% 2027 Notes
2,478 1,882 
Existing 3.450% 2031 Notes
11,953 6,721 
Total$20,990 $14,439 
The New 2030 Notes are fully and unconditionally guaranteed on a joint, several and unsecured basis by certain of our subsidiaries which also guarantee our senior secured notes due 2027. The New 2030 Notes require semi-annual payments of interest only and are prepayable, at par plus accrued interest, after March 12, 2029. During the three months ended March 31, 2025, we recorded an aggregate gain related to the Senior Note Exchange of $685, or $0.01 per common share, which is included in net loss on early extinguishment of debt in our condensed consolidated statements of comprehensive income (loss).
As of March 31, 2025, seven of our properties with an aggregate gross book value of real estate assets of $305,456 were encumbered by mortgage notes with an aggregate principal amount of $177,320. Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants.