FSP · 10-Q · 2026Q1 · Full report

Interest Rate and Refinancing Exposure

FRANKLIN STREET PROPERTIES CORP /MA/ · 2026-04-28 · Importance 74 · Surprise 84

Interest expense increased by approximately $1.1 million in the three months ended March 31, 2026 compared to the same period in 2025, primarily due to a higher principal amount of debt outstanding during the period. The Company repaid in full its BMO Term Loan (~$70.7 million), BofA Term Loan (~$55.3 million) and two series of Senior Notes (aggregate ~$122.9 million) on February 26, 2026 as part of the refinancing into the TPG facility. The BMO, BofA and Senior Notes had seen their stated interest rates increase to 9.00% effective April 1, 2025, which contributed to elevated interest costs prior to refinancing. The Company notes that the new facility has covenant and maturity provisions (initial maturity Feb 26, 2029) that will shape interest and refinancing risk going forward.

Key facts

• The $320 million secured credit facility closed on February 26, 2026 has an original stated maturity of February 26, 2029 subject to potential extension of up to one year at the Company's option.
• Effective April 1, 2025, the interest rate on the BMO Term Loan increased from 8.00% to 9.00% per annum and the weighted average variable interest rate on amounts outstanding under the BMO Term Loan was 9% for January 1, 2026 until February 26, 2026.
• Effective April 1, 2025, the interest rate on the BofA Term Loan increased from 8.00% to 9.00% per annum and the weighted average variable interest rate on amounts outstanding under the BofA Term Loan was 9% for January 1, 2026 until February 26, 2026.
• Effective April 1, 2025, the interest rates on both Series A and Series B Senior Notes increased from 8.00% to 9.00% per annum.

Impact estimates