Diversified Healthcare Trust announced that it has priced an aggregate principal amount of $941 million of senior secured notes due January 2026, with a 12-month extension option, subject to the satisfaction of certain conditions and payment of an extension fee. The notes will generate approximately $750 million in gross proceeds before issuance costs and will accrete at a rate of 11.25% annually, compounded semi-annually. If the 12-month extension option is exercised, interest payments will be due semi-annually during the extension period at an initial interest rate of 11.25% with increases of 50 basis points every 90 days that the notes remain outstanding.

The closing is expected to occur on December 21, 2023, subject to the satisfaction of customary closing conditions. The notes will be guaranteed on a joint, several and unsecured basis by subsidiaries of DHC that own the properties comprising the collateral for the notes and on a joint, several and Unsecured basis by all subsidiaries of DHC that guarantee its existing senior notes due 2025 and 2031. DHC believes that the collateral properties have an estimated fair value of approximately $1.57 billion.

The net proceeds from this transaction, after initial purchaser discounts and offering costs, are expected to be $732 million and used to repay all of DHC's outstanding debt maturing in 2024, and for general business purposes. The debt being repaid includes DHC's $450 million secured credit facility and its outstanding 4.750% Senior Notes due in May 2024 is dependent on the closing of the offering and may not occur. In addition, although DHC will immediately be in compliance with the debt incurrence covenants under its remaining public debt agreements as a result of this transaction and the repayment of these outstanding debts, DHC may not be able to execute on additional financing strategies or have sufficient liquidity available to fund its capital projects as it currently expects, and DHC may not be able To continue to invest in the growth and recovery of its senior living communities as a result of economic and market conditions or other reasons.

Actual results may differ materially from those contained in or implied by DHC's forward-looking statements.