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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
March 30, 2026
TERRA PROPERTY TRUST, INC.
(Exact name of registrant as specified in its
charter)
| Maryland |
|
001-40496 |
|
81-0963486 |
|
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
205 West 28th Street, 12th Floor
New York New York 10001
(Address of principal executive offices, including
zip code)
(212) 753-5100
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e- 4(c)) |
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| 6.00% Notes due 2026 |
TPTA |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
| Item 1.01 |
Entry into a Material Definitive Agreement. |
Exchange
Offers
On March 30,
2026, Terra Property Trust, Inc. (the “Company”) completed its previously disclosed exchange offers (the “Exchange
Offers”), pursuant to which the Company offered to exchange all validly tendered (i) unsecured 6.00% Senior Notes due June 30,
2026, issued by the Company (the “Company Notes”) and (ii) unsecured 7.00% Senior Notes due March 31, 2026, issued
by Terra Income Fund 6, LLC (“TIF6”), a wholly owned subsidiary of the Company (the “TIF6 Notes”), for new 7.00%
Senior Secured Notes due March 31, 2029 of the Company (the “Exchange Notes”).
The Exchange
Offers expired at 5:00 p.m. New York City time, on March 26, 2026, and the final settlement of the Exchange Offers took place
on March 30, 2026. On March 31, 2026, TIF6 repaid the remaining outstanding principal balance of the TIF6 Notes.
In connection
with the Exchange Offers, the Company filed a registration statement on Form S-4 (File No. 333-293479) relating to the issuance
of the Exchange Notes with the U.S. Securities and Exchange Commission (the “SEC”) on February 13, 2026 (as amended from
time to time, the “Registration Statement”), which was declared effective by the SEC on March 26, 2026. The Exchange
Offers were made pursuant to the terms and conditions set forth in the Registration Statement, which contains a more comprehensive description
of the Exchange Offers.
Indenture
As previously
announced, $24,027,025 of the Company Notes and $1,550,975 of the TIF6 Notes were validly tendered and not withdrawn in the Exchange Offers.
On March 30, 2026 (the “Issue Date”), the Company issued Exchange Notes with an aggregate principal balance of $25,578,000.
The Exchange Notes were issued pursuant to an Indenture (the “Indenture”), dated March 30, 2026, by and between the Company
and U.S. Bank Trust Company, National Association, in its capacity as trustee and collateral agent, a copy of which is filed as Exhibit 4.1
hereto, and is incorporated herein by reference.
The Exchange
Notes are the senior secured obligations of the Company to the extent of the value of the Collateral (as defined below) securing the Exchange
Notes, pari passu in right of payment with all of the Company’s existing and future unsubordinated debt that is not expressly subordinated
in right of payment to the Exchange Notes, senior in right of payment to any of the Company’s existing and future debt that is expressly
subordinated in right of payment to the Exchange Notes, effectively senior to the Company’s existing and future debt that is unsecured
or that is secured by a junior lien on the Collateral securing the Exchange Notes, in each case to the extent of the value of the Collateral
securing the Exchange Notes, effectively subordinated to all of the Company’s existing and future debt, guarantees and other liabilities
(including trade payables) that are secured by liens on assets that do not constitute a part of the Collateral securing the Exchange Notes
to the extent of the value of such assets securing such debt and other liabilities, and structurally subordinated to all existing and
future debt and other liabilities (including trade payables) of any existing and future subsidiaries of the Company’s. Subject to
certain exceptions, the Exchange Notes will be secured by a perfected security interest in the Collateral.
As of the
Issue Date, the Exchange Notes were not guaranteed by any of the Company’s subsidiaries. Subject to certain exceptions, the Exchange
Notes are secured by perfected liens granted by the Company on certain equity interests in the Company’s subsidiaries held by the
Company from time to time, as more fully described in the Registration Statement. Subject to certain exceptions described in the Registration
Statement, the Company will initially grant liens in the following (collectively with any liens on additional collateral that are granted
by the Company from time to time, the “Collateral”): the equity interests the Company holds in (i) Boundary Pref LLC,
(ii) Howell Lendco LLC, (iii) Maspen MS I LLC, (iv) Royaltree Lendco, LLC, (v) Terra 370 Lex, LLC, (vi) Terra
Driggs, LLC, (vii) Terra Walnut Development, LLC, (viii) Vaspen MS I LLC, (ix) XS Maple LLC, (x) Terra Industrial
LLC, (xi) MCM Maxx, LLC, (xii) Terra Mortgage Portfolio I, LLC, (xiii) Terra Mortgage Portfolio II, LLC, (xiv) Fund
Financing, LLC, (xv) TPT Special Subsidiary, LLC, (xvi) University Park Lendco, LLC, (xvii) Peachtree Lendco LLC and (xviii) Wonder.
However, the Indenture permits the Company to release the liens on any Collateral securing the Exchange Notes, if: (i) no event of
default shall have occurred and be continuing; (ii) the Company maintains a Collateral Coverage Ratio (as defined in the Indenture)
of not less than 1.35 to 1.00 (calculated on a pro forma basis, as if the release of such Collateral had occurred on the last day of the
most recent fiscal quarter for which financial information in respect thereof is available); and (iii) certain other requirements
are met as further described in the Indenture and Security Documents (as defined in the Indenture).
The Company
will pay interest on the Exchange Notes monthly, on the last day of each month, beginning April 30, 2026. Interest on the Exchange
Notes will accrue from March 30, 2026, at a rate of 7.00% per annum. The Exchange Notes will mature on March 31, 2029, unless
earlier redeemed or repurchased by the Company in accordance with their terms prior to such date.
Prior to
December 31, 2026, the Company may redeem the Exchange Notes in whole or in part at any time, or from time to time, at a redemption
price of 101% of the outstanding principal amount of the Exchange Notes to be redeemed plus accrued and unpaid interest payments otherwise
payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption. On or after December 31,
2026, the Company may redeem the Exchange Notes in whole or in part at any time, or from time to time, at a redemption price of 100% of
the outstanding principal amount of the Exchange Notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon
for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption.
The Indenture
contains certain covenants that, among other things, limit the Company’s ability to: (i) incur certain additional indebtedness
unless the Company has a Collateral Coverage Ratio of not less than 1.35 to 1.00 (calculated on a pro forma basis, as if the incurrence
of such additional indebtedness had occurred on the last day of the most recent fiscal quarter for which financial information respect
thereof is available); (ii) pay Dividends (as defined in the Indenture) in excess of 90% of the Company’s taxable income or
purchase any outstanding Capital Interests (as defined in the Indenture) unless the Company has a Collateral Coverage Ratio of not less
than 1.35 to 1.00 (calculated on a pro forma basis, as if the payment of such Dividends or repurchase of such Capital Interests had occurred
on the last day of the most recent fiscal quarter for which financial information respect thereof is available); and (iii) merge
or consolidate with another person.
The Indenture
does not require the Company to offer to purchase the Exchange Notes in connection with a change of control or any other event.
The Indenture
provides for certain events of default, including: (i) the Company’s failure to pay the principal (or premium, if any) of any
Exchange Note when due; (ii) the Company’s failure to pay the interest on any Exchange Note when due and such default is not
cured within 30 days; (iii) the Company remains in breach of any other covenant with respect to the Exchange Notes for 60 days after
receiving a written notice of default stating the Company is in breach; (iv) the occurrence of any of the following: (a) except
as permitted by the Indenture, any Security Document or the Intercreditor Agreement (as defined in the Indenture) (on or after the date
it is executed) ceases for any reason to be fully enforceable, in each case, on any material portion of the Collateral purported to be
covered thereby; (b) except as permitted by the indenture governing the Exchange Notes, any lien purported to be granted under
any Security Document on any material portion of the Collateral ceases to be a valid, enforceable and perfected lien with the priority
required by the Security Documents; or (c) the Company, or any person acting on its behalf, denies or disaffirms, in any pleading
in any court of competent jurisdiction, any material obligation of the Company’s set forth in or arising under any Security Document
and in the case of clauses (a) through (c) hereof, such failure or such assertion shall be continued uncured or rescinded for
a period of 30 days; (v) the Company file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization; and
(vi) in the case of certain orders or decrees entered against the Company under any bankruptcy law, such order or decree remains
undischarged or unstayed for a period of 60 days. The events of default are subject to important exceptions and qualifications, as set
forth in the Indenture.
The above description of the
Indenture and the Exchange Notes is a summary only and is qualified in its entirety by reference to the Indenture and the Form of
Exchange Notes included therein, which are attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item
1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit
No. |
|
Description |
| |
|
| 4.1 |
|
Indenture,
dated as of March 30, 2026, by and among Terra Property Trust, Inc., and U.S. Bank Trust Company, National Association.
|
| |
|
| 4.2 |
|
Form of
7.00% Senior Secured Notes due 2029 (included as Exhibit A in Exhibit 4.1 hereto). |
| |
|
| 104 |
|
Cover
Page Interactive Data File, formatted in inline XBRL. |
Signatures
Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
| |
TERRA PROPERTY TRUST, INC. |
| |
|
|
| Date: April 1, 2026 |
By: |
/s/ Gregory Pinkus |
| |
Name: |
Gregory Pinkus |
| |
Title: |
Chief Financial Officer |
