Note 7 – Secured Debt Arrangements, Net

We utilized secured debt arrangements to finance the origination activity in our loan portfolio. Our secured debt arrangements were comprised of secured credit facilities, a private securitization, and a revolving credit facility. During the three months ended June 30, 2026, all outstanding borrowings were repaid in full using proceeds from the Asset Sale (as defined in "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net"). Upon repayment, we recognized a loss of $7.8 million recorded within loss on extinguishment of debt on our condensed consolidated statement of operations due to the write-off of unamortized deferred financing costs.

During the six months ended June 30, 2026, we repaid all of our outstanding secured debt arrangements totaling $6.9 billion. As there were no outstanding borrowings as of June 30, 2026, the following tables present information solely as of December 31, 2025.

Terms of our secured credit facilities were designed to keep each lender's credit exposure generally constant as a percentage of the underlying value of the assets pledged as security to the facility. If the credit of the underlying collateral value decreased, the amount of leverage to us may have been reduced. As of December 31, 2025, the weighted-average haircut under our secured debt arrangements was approximately 27.1%. Our secured credit facilities did not contain capital markets-based mark-to-market provisions.

Revolving Credit Facility

We were party to a revolving credit facility (the "Revolving Credit Facility") administered by Bank of America, N.A. The Revolving Credit Facility permitted borrowings secured by qualifying commercial mortgage loans and real property owned assets. During the third quarter of 2025, we amended and restated the facility to extend the maturity date from March 2026 to August 2028 and increased the borrowing capacity from $160.0 million to $275.0 million with a syndicate of five lenders. In connection with the amendment and restatement, we incurred $2.7 million of deferred financing costs, including issuance and legal related costs. The Revolving Credit Facility was also subject to certain financial covenants, which are discussed below (see "Debt Covenants").

On the Closing Date, we used a portion of the proceeds from the Asset Sale to fully repay all outstanding revolving credit loans and other obligations under the Amended and Restated Credit Agreement, dated as of August 7, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the "Revolving Credit Facility Agreement"), among ACREFI RCF I, LLC, as Borrower, the Company, as Parent Guarantor, the lenders party thereto, and Bank of America, N.A., as Administrative Agent. As of the Closing Date, all commitments under the Revolving Credit Facility Agreement were terminated in accordance with the terms of the Revolving Credit Facility Agreement, and all outstanding balances were paid in full in conjunction with such termination. During the three months ended June 30, 2026, we recognized a loss of $2.1 million recorded within loss on extinguishment of debt on our condensed consolidated statement of operations due to the write-off of unamortized deferred financing costs upon repayment.

As of June 30, 2026 and December 31, 2025, we had no outstanding balance on the Revolving Credit Facility.

During the three and six months ended June 30, 2026, we recorded $24.0 thousand and $160.0 thousand of unused fees, respectively. During the three and six months ended June 30, 2025, we recorded $63.0 thousand and $143.0 thousand of unused fees, respectively.

During both the three and six months ended June 30, 2026, we recorded $0.4 million of contractual interest expense. During both the three and six months ended June 30, 2025, we recorded $0.6 million of contractual interest expense.

Barclays Private Securitization

We were party to a private securitization with Barclays Bank plc ("Barclays") (such securitization, the "Barclays Private Securitization"). Commercial mortgage loans financed under the Barclays Securitization were denominated in GBP, EUR, and SEK. On the Closing Date, a portion of the proceeds from the Asset Sale were used to fully repay the Barclays Private Securitization.

The Barclays Private Securitization did not include daily margining provisions and granted us significant discretion to modify certain terms of the underlying collateral including waiving certain loan-level covenant breaches and deferring or waiving of debt service payments for up to 18 months. The securitization included loan-to-value based covenants with deleveraging requirements that were based on significant declines in the value of the collateral as determined by an annual third-party (engaged by us) appraisal process tied to the provisions of the underlying loan agreements. We believe this provided us with both cushion and predictability to avoid sudden unexpected outcomes and material repayment requirements.

As the Barclays Private Securitization was fully repaid as of June 30, 2026, the following tables present information solely as of December 31, 2025, except where noted. The table below provides principal balances and the carrying value for commercial mortgage loans pledged to the Barclays Private Securitization as of December 31, 2025 ($ in thousands):

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of December 31, 2025 ($ in thousands):

Debt Covenants

The guarantees related to our secured debt arrangements contained the following financial covenants: (i) tangible net worth must be greater than $1.25 billion plus 75% of the net cash proceeds of any equity issuance after March 31, 2017 (or $1.42 billion plus 75% of the net cash proceeds of any equity issuance after June 30, 2025 with respect to the Revolving Credit Facility); (ii) our ratio of total indebtedness to total assets shall not exceed 83.33% (81.82% for the Revolving Credit Facility) and (iii) our liquidity cannot be less than an amount equal to the greater of 5.0% of total recourse indebtedness or $30.0 million. Under these covenants, our General CECL Allowance was added back to our tangible net worth calculation and total assets and total indebtedness were subject to certain adjustments. The Revolving Credit Facility contained an additional financial covenant to maintain a minimum interest coverage ratio of not less than 1.3:1.

Effective as of June 30, 2025, we amended our financial covenants from a maximum ratio of total indebtedness to tangible net worth of 4.0:1.0 to a ratio of total indebtedness to total assets not to exceed 83.33% (81.82% for our Revolving Credit Facility). We were in compliance with our covenants for the period ended December 31, 2025. As we repaid all of our secured debt arrangements during the three months ended June 30, 2026, compliance with these covenants is no longer required.

Note 8 – Senior Secured Term Loans, Net

In June 2025, we entered into a $750.0 million senior secured term loan facility (the "2030 Term Loan") to refinance and replace our previously outstanding 2026 Term Loan and 2028 Term Loans (each as defined and described below). The 2030 Term Loan was due to mature June 2030 and bore interest at a rate of SOFR plus 3.25%. The 2030 Term Loan was issued at a price of 99.3% and was amortizing with repayments of 0.25% of the total committed principal per quarter. The 2030 Term Loan contained restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The refinancing was accounted for as a continuation of the existing loans in accordance with ASC Topic 470 "Debt."

On the Closing Date, we repaid in full the 2030 Term Loan and all other obligations under the Term Loan Credit Agreement, dated as of June 13, 2025, among the Company, as Borrower, the lenders party thereto from time to time, and Goldman Sachs Bank USA, as Administrative Agent and Collateral Agent, using proceeds from the Asset Sale. The full repayment of the 2030 Term Loan resulted in principal repayment of $744.4 million. During the three months ended June 30, 2026, we recognized a loss of $17.3 million recorded within loss on extinguishment of debt on our condensed consolidated statement of operations due to the write-off of the unamortized original issue discount and deferred financing costs upon repayment.

Prior to refinancing in June 2025, we held a $471.3 million senior secured term loan (the "2026 Term Loan") that bore interest at SOFR plus 2.86% and a $288.0 million senior secured term loan (the "2028 Term Loan", collectively with the 2026 Term Loan, the "2026 and 2028 Term Loans") that bore interest at SOFR (with a floor of 0.50%) plus 3.61%. The 2026 and 2028 Term Loans contained restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities and were issued at a price of 99.5% and 99.0%, respectively.

Covenants

The 2030 Term Loan contained a financial covenant that our recourse indebtedness shall not exceed 83.3% of our total assets (subject to certain adjustments). As of December 31, 2025, we were in compliance with this covenant. As we repaid the 2030 Term Loan during the three months ended June 30, 2026, compliance with the covenant is no longer required.