Seven Hills Realty Trust Enters into a $125 Million Master Repurchase Facility with Wells Fargo Bank, N.A.

Rhea-AI Summary

Seven Hills Realty Trust (Nasdaq: SEVN) has announced a $125 million master repurchase facility agreement with Wells Fargo Bank. This facility allows SEVN to leverage its commercial mortgage loan investments and features a three-year term with advances of up to 80% on whole loan investments, expandable to $250 million. This financing diversifies SEVN's capital sources and aims to enhance return on equity. Total debt capacity is now over $750 million, supporting expansion of its investment portfolio to nearly $1 billion.

Positive

• New $125 million financing agreement with Wells Fargo enhances capital sources.
• Total debt capacity increases to over $750 million, enabling expansion.
• Supports an expansion of investment portfolio to nearly $1 billion.

Negative

• Advances under the facility are subject to financial covenants that may not be satisfied.
• Actual costs of financing may exceed expected due to additional fees.

NEWTON, Mass.--(BUSINESS WIRE)-- Seven Hills Realty Trust (Nasdaq: SEVN) today announced that it has entered into an agreement for a $125 million master repurchase facility with Wells Fargo Bank, National Association (“Wells Fargo”), which SEVN may use to leverage its commercial mortgage loan investments, subject to customary requirements. The facility has a three-year term, provides for advances of up to 80% of a whole loan investment and has an accordion feature to increase the facility to $250 million. Interest on advances under the facility will be calculated at SOFR plus a competitive margin.

Doug Lanois, Chief Financial Officer and Treasurer, made the following statement:

“This new financing arrangement with Wells Fargo further diversifies SEVN’s capital sources at attractive pricing that will help with the continued execution of our business strategy and enhance our return on equity. In combination with SEVN’s existing secured financings, this repurchase facility increases the company’s total debt capacity to more than $750 million, providing ample runway to expand our investment portfolio to nearly $1 billion in total committed capital.”

About Seven Hills Realty Trust

Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate finance company that originates and invests in first mortgage loans secured by middle market and transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $33 billion in assets under management and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about SEVN, please visit www.sevnreit.com.

WARNING CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever SEVN uses words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” and negatives or derivatives of these or similar expressions, SEVN is making forward-looking statements. These forward-looking statements are based upon SEVN’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by SEVN’s forward-looking statements as a result of various factors. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond SEVN’s control. For example:

• Advances under this facility are subject to SEVN satisfying certain financial covenants and other facility conditions that SEVN may be unable to satisfy. In addition, actual costs under the financing facility will be higher than SOFR plus an applicable margin because of fees and expenses associated with the facility.
• Statements about the continued growth of SEVN’s loan portfolio may imply that SEVN will successfully grow its loan portfolio and that it will benefit as a result. However, SEVN’s ability to make additional loans is subject to various risks, including competition, demand for loans of the type SEVN provides, SEVN’s ability to successfully negotiate and enter into loan agreements and other matters. In addition, any growth of its loan portfolio may not benefit SEVN if, for example, SEVN does not realize the returns it expects from that growth.

The information contained in SEVN’s filings with the Securities and Exchange Commission, or SEC, including under “Risk Factors” in SEVN’s periodic reports or incorporated therein, identifies other important factors that could cause SEVN’s actual results to differ materially from those stated in or implied by SEVN’s forward-looking statements. SEVN’s filings with the SEC are available on the SEC’s website at www.sec.gov.

You should not place undue reliance upon forward-looking statements.

Except as required by law, SEVN does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220314005740/en/

Kevin Barry, Director, Investor Relations

(617) 658-0776

www.sevnreit.com

Source: Seven Hills Realty Trust

FAQ

What is the purpose of the $125 million master repurchase facility for SEVN?

The facility is designed to leverage SEVN's commercial mortgage loan investments and diversify its capital sources.

How does the new financing affect SEVN's total debt capacity?

The agreement increases SEVN's total debt capacity to over $750 million.

What are the terms of the master repurchase facility agreement?

The facility has a three-year term, allows advances of up to 80% of whole loan investments, and has an accordion feature to expand up to $250 million.

What are the potential risks associated with the new financing for SEVN?

Advances are subject to financial covenants that SEVN may not meet, and actual financing costs may exceed expectations due to additional fees.

How will the new facility impact SEVN's investment strategy?

It will support SEVN's strategy to enhance returns and expand its investment portfolio to nearly $1 billion.