Terra Property Trust, Inc. Releases Details on Exchange Offers, Engages Restructuring Advisors

Key Points from the Report

• Terra Property Trust, Inc. (the “Company”) filed an amended Form S-4 registration statement on March 12, 2026, regarding its planned exchange offers and consent solicitation.
• The exchange offers involve swapping unsecured and secured notes (TPT Notes and TIF6 Notes) for new, secured 7.00% Senior Notes due 2029.
• Existing noteholders who do not participate may lose covenant protection if requisite consents are received.
• Low participation to date: Only 3.8% of TPT Notes and 0.37% of TIF6 Notes have been tendered.
• Liquidity concerns: The Company and its wholly owned subsidiary, Terra Income Fund 6, LLC (TIF6), may not have sufficient liquidity to repay maturing notes without additional financing or successful exchange participation.
• Restructuring advisors hired: Portage Point Partners, LLC as restructuring banker and Alston & Bird LLP as restructuring (legal) counsel, signaling potential for further restructuring or strategic alternatives.

Detailed Article

NEW YORK, March 12, 2026 — Terra Property Trust, Inc. (“Terra Property Trust” or “the Company”), a real estate investment trust focused on commercial real estate credit investments, has released new information regarding its ongoing exchange offers and announced the engagement of key restructuring advisors. The Company’s latest filing and strategic actions may have significant implications for shareholders and the value of its securities.

Exchange Offers and Consent Solicitation

The Company is making exchange offers to holders of two series of notes:

• Unsecured 6.00% Senior Notes due June 30, 2026 (“TPT Notes”)
• Secured 7.00% Senior Notes due March 31, 2026 (“TIF6 Notes”), issued by its wholly owned subsidiary, Terra Income Fund 6, LLC (“TIF6”)

Through these offers, the Company proposes that for every \$25 principal amount of existing notes tendered, investors will receive \$25 principal amount of newly issued 7.00% Senior Secured Notes due 2029. Importantly, these new Exchange Notes will be secured by a first lien on the equity interests of certain Company subsidiaries, potentially enhancing their security and appeal compared to the notes being replaced.

The Company is also running a related consent solicitation to amend the indenture governing the TPT Notes. If enough consents are received, holders of TPT Notes who do not exchange may see their covenant protections significantly reduced.

Liquidity Challenges and Financial Position

As of December 31, 2025, critical liquidity figures are as follows:

• TIF6 had an outstanding principal balance of approximately \$38.4 million in TIF6 Notes, with just \$0.4 million in cash and cash equivalents.
• TIF6 also held a \$48.1 million promissory note due from the Company (due March 31, 2027).
• Total assets for TIF6 were approximately \$105.8 million, with almost half tied to the Company’s promissory note.
• The Company had \$80.4 million outstanding in TPT Notes and \$33.2 million in cash and equivalents.

Notably, the Company is not a guarantor of the TIF6 Notes and holds no contractual obligation to provide liquidity to TIF6 for note repayment. This structure, combined with low cash balances and the low tender rate (3.8% of TPT Notes and 0.37% of TIF6 Notes offered for exchange), raises substantial concerns about the Company’s ability to meet upcoming maturities without additional financing or higher participation in the exchange.

The Company explicitly acknowledges the risk that there may not be enough liquidity for TIF6 to repay its notes at maturity, while also preserving Terra Property Trust’s status as a going concern. The Company cannot assure investors that alternative or additional liquidity will be available on acceptable terms, or at narrow, if at all.

Engagement of Restructuring Advisors—A Key Red Flag

In a move that is likely to be closely scrutinized by shareholders and the market, the Company has engaged Portage Point Partners, LLC as restructuring banker and Alston & Bird LLP as restructuring counsel. These advisors are assisting with strategic alternatives related to the Company’s capital structure, including restructuring options that could impact noteholders and, potentially, shareholders. Ladenburg Thalmann & Co. Inc. is managing the exchange offers.

The engagement of restructuring advisors is a critical development, often signaling that a company is preparing for the possibility of debt restructuring, recapitalization, or other strategic changes, which can be highly price sensitive for equity holders and debt investors.

Risks and Forward-Looking Statements

The Company highlights numerous risks and uncertainties, including:

• Uncertainty around the Company’s ability to secure adequate liquidity for upcoming debt maturities
• Risks that the exchange offers or consent solicitations may not be successful or completed
• Potential adverse impacts on financial performance, operating results, and the ability to continue regular distributions
• Broader market risks, including real estate market volatility, changes in interest rates, and regulatory changes

Investors are strongly urged to review the registration statement, prospectus, and all SEC filings for a comprehensive understanding of the risks and terms associated with the exchange offers.

Shareholder Impact and Price Sensitivity

• The low participation in the exchange offers, combined with pronounced liquidity concerns and the engagement of restructuring advisors, are highly material events. These developments may signal that the Company is facing significant refinancing or restructuring risk, which could negatively affect the value of Terra Property Trust’s shares and debt securities.
• Shareholders should closely monitor further announcements regarding the exchange offers, the results of the consent solicitation, and any potential restructuring actions.

Contact and Additional Information

For more information, investors can contact Investor Relations at [email protected] or access filings at the SEC’s website and the Company’s own investor relations page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review all official filings and consult their financial advisors before making any investment decisions. The information is based on the Company’s public filings as of March 12, 2026, and subsequent events may alter the Company’s outlook or strategic direction.

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