Terra Property Trust, Inc. Announces Exchange Offer Details and Engages Restructuring Advisors

Key Points for Investors

• Exchange Offers Announced: Terra Property Trust, Inc. (“the Company”) has filed a registration statement with the SEC relating to exchange offers for two series of notes: the Company’s unsecured 6.00% Senior Notes due June 30, 2026 (“TPT Notes”) and the secured 7.00% Senior Notes due March 31, 2026 (“TIF6 Notes”) issued by Terra Income Fund 6, LLC (“TIF6”), a wholly owned subsidiary.
• Terms of the Exchange: Each \$25 principal amount of Existing Notes tendered in the exchange offers will be exchanged for \$25 principal amount of newly issued 7.00% Senior Secured Notes due 2029 (“Exchange Notes”) from the Company. These new Exchange Notes will be secured by a perfected first lien pledge in the equity interests of certain of the Company’s direct subsidiaries.
• Consent Solicitation: The Company is also conducting a consent solicitation with respect to the TPT Notes. If the requisite consents are obtained, covenant protections in the TPT Notes will be significantly reduced compared to the Exchange Notes.
• Outstanding Principal Balances:
  • TIF6 Notes: \$38.4 million as of December 31, 2025. TIF6 had cash and cash equivalents of \$0.4 million and assets of \$105.8 million, including a \$48.1 million promissory note due March 31, 2027, owed by the Company.
  • TPT Notes: \$80.4 million as of December 31, 2025. The Company had cash and cash equivalents of \$33.2 million.
• Tendered Notes Status: As of March 12, 2026, only 3.80% of TPT Notes and 0.37% of TIF6 Notes have been tendered in the exchange offers, indicating limited participation so far.
• Liquidity Concerns: The Company warns that there may not be sufficient liquidity for TIF6 to repay the TIF6 Notes at maturity, raising concerns about the Company’s ongoing viability and its ability to repay remaining TPT Notes.
• Restructuring Advisors Engaged: Terra Property Trust has engaged Portage Point Partners, LLC as restructuring banker and Alston & Bird LLP as restructuring counsel to evaluate strategic alternatives, including potential restructuring options. Ladenburg Thalmann & Co. Inc. is serving as Dealer Manager for the exchange offers.
• Company Profile: Terra Property Trust is an externally managed REIT, focused on loans and assets secured by commercial real estate, as well as strategic equity investments. The Company aims to provide attractive risk-adjusted returns through high current income and potential capital appreciation. It has been taxed as a REIT since 2016 and is advised by Terra REIT Advisors, LLC.
• Forward-Looking Statements & Risks: The Company highlights significant risks and uncertainties—including its ability to meet debt obligations, successfully complete the exchange offers and consent solicitation, secure alternative liquidity, and the impact of adverse economic conditions, regulatory changes, and market volatility.
• Regulatory Status: The exchange offers are subject to the SEC’s approval of the registration statement. Investors are urged to review the SEC filings carefully.

Important Shareholder Considerations

• Potential Price Sensitive Issues:
  • Low participation rates in the exchange offers (3.80% for TPT Notes, 0.37% for TIF6 Notes) raise concerns about the success of the restructuring and the Company’s ability to manage upcoming debt maturities.
  • The Company has explicitly stated that liquidity may be insufficient for TIF6 to repay its notes, and there is no assurance of obtaining alternative or additional liquidity. This may threaten the Company’s viability as a going concern and could materially impact share values.
  • If the consent solicitation is successful, holders of the TPT Notes who do not participate may face materially reduced covenant protections, making their investment riskier.
  • Engagement of restructuring advisors signals the possibility of upcoming strategic alternatives, including restructuring or other measures, which could significantly affect the value of the Company’s securities.
  • The Company is not a guarantor of the TIF6 Notes and has no contractual obligation to support TIF6’s repayment, adding further risk for noteholders and shareholders.
• Risks and Uncertainties: The Company’s forward-looking statements highlight risks related to liquidity, refinancing, upcoming maturities, business operations, regulatory changes, and market volatility. These could have material adverse effects on the Company’s business, financial condition, and share price.
• Regulatory Processes: The exchange offers are not yet effective, pending SEC approval. Investors should monitor the Company’s filings for updates.

Summary

Terra Property Trust, Inc. has initiated exchange offers for its senior notes, offering newly secured notes in exchange for existing unsecured and secured notes. However, participation has been low, raising significant concerns about the Company’s ability to manage debt maturities and liquidity. The Company has retained restructuring advisors, indicating it may pursue strategic alternatives, including restructuring, that could materially impact the share price. Shareholders and investors should closely monitor developments, as these actions and warnings regarding liquidity and covenant protections are highly price sensitive.

Additional Information

The exchange offers are subject to SEC approval of the registration statement. Investors are strongly urged to review all related SEC filings and disclosure documents for complete information about the terms, risks, and implications of the exchange offers and consent solicitation.

Contact

For further information, investors can contact:
Investor Relations: [email protected]

Disclaimer: This article is intended for informational purposes only and does not constitute investment advice. Investors are urged to conduct their own due diligence and consult professional advisors before making investment decisions. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. Please review the Company’s filings with the SEC for comprehensive risk disclosures.

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