Terra Property Trust, Inc. 8-K

What Happened
Terra Property Trust, Inc. announced it completed previously disclosed exchange offers and issued $25,578,000 aggregate principal of new 7.00% Senior Secured Notes due March 31, 2029 (the “Exchange Notes”). The Exchange Offers settled on March 30, 2026; interest on the Exchange Notes accrues from March 30, 2026 and will be paid monthly beginning April 30, 2026. Terra Income Fund 6, LLC (TIF6), a wholly owned subsidiary, repaid the remaining outstanding principal on its prior TIF6 notes on March 31, 2026.

Key Details

• $24,027,025 of the Company’s 6.00% Senior Notes due June 30, 2026 and $1,550,975 of TIF6’s 7.00% Senior Notes due March 31, 2026 were validly tendered and exchanged for $25,578,000 of 7.00% Senior Secured Notes due 2029.
• The Exchange Notes are issued under an Indenture dated March 30, 2026 with U.S. Bank Trust Company, N.A. as trustee and collateral agent, and are secured by a perfected security interest in specified equity interests of multiple subsidiaries (collateral described in the filing).
• Interest rate: 7.00% per annum, monthly payments; maturity: March 31, 2029. Early redemption: 101% of principal (plus accrued interest) prior to Dec 31, 2026; 100% on or after Dec 31, 2026.
• Covenants include limits on incurring additional indebtedness, dividend payments above certain thresholds, and capital interest repurchases unless a Collateral Coverage Ratio of at least 1.35:1.00 (pro forma) is maintained.

Why It Matters
This transaction extends the company’s near-term debt maturities by replacing 2026 unsecured notes with secured notes maturing in 2029, potentially easing short-term refinancing pressure. Holders of the new Exchange Notes benefit from security interests in specified subsidiary equity, but recovery is limited to the value of that collateral and the notes remain structurally subordinated to liabilities of subsidiaries. The Indenture’s Collateral Coverage Ratio and related covenants restrict the company’s ability to take on new debt or pay large dividends without meeting coverage tests—important constraints for investors monitoring liquidity and capital returns.