Diversified Healthcare Trust Defaults on $450 Million Credit Facility
By Dean Seal
Diversified Healthcare Trust disclosed Thursday a nonmonetary default under its $450 million credit facility due to insufficient collateral value.
The facility requires the healthcare-focused real estate investment trust to maintain collateral properties with an aggregate appraised value of at least $1.09 billion, Diversified said.
On June 23, an administrative agent notified Diversified that the reappraised value of properties securing the facility had fallen to $1.05 billion from $1.34 billion. That's a 22% drop since they were last appraised in January 2021.
Diversified is negotiating with lenders for a limited waiver of the default through September 30, which is the outside closing date of a pending merger with Office Properties Income Trust that would fully refinance the $450 million facility.
For the time being, Diversified can't issue any new debt or refinance expiring debt.
Diversified said the best alternative available to it is the merger with Office Properties.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
June 29, 2023 08:54 ET (12:54 GMT)
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