• Office Properties Income Trust's new baby bond, OPINL, has almost the same YTW as the previously issued OPINI.
• The company's Debt-to-Market cap ratio is at 1.73.
• There are only two other baby bonds, issued by a REIT.
• Qwest Corp.'s and Prospect Capital Corp.'s baby bonds are the only with a higher Yield-to-Maturity than OPI's issues.
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Introduction

REITs when resorting to financing themselves with other than common stocks, they usually do it through preferred shares. At the moment, there are a total of 121 preferred stocks, issued by a REIT, by not adding those issued by mortgage REITs. However, we also have three baby bonds, listed on the Exchange, issued by a real estate investment trust. These are Diversified Healthcare Trust's (NASDAQ:DHC) DHCNL and DHCNI, and Office Properties Income Trust's (NASDAQ:OPI) OPINI. Now, OPI enters the primary market with another baby bond, making the total number 4.

The New Issue

Before we submerge into our brief analysis, here is a link to the 424B5 Filing by Office Properties Income Trust - the prospectus.

Source: SEC.gov

For a total of 6M notes issued, the total gross proceeds to the company are $150M. You can find some relevant information about the new baby bond in the table below:

Source: Author's spreadsheet

Office Properties Income Trust 6.375% Senior Notes due 2050 (NASDAQ: OPINL) pay a fixed interest at a rate of 6.375%. The new issue bears a "BBB-" Standard & Poor's rating, it is callable as of 06/23/2025, and is maturing on 06/23/2050. OPINL is currently trading close to its par value at a price of $24.95 and has a 6.57% Yield-to-Call and a 6.46% Yield-to-Maturity. The interest paid by this baby bond is not eligible for the preferential 15% to 20% tax rate. This results in the "qualified equivalent" YTC and YTM sitting around 5.47% and 5.38%, respectively.

Here is how the stock's YTC curve looks like right now:

Source: Author's spreadsheet

Office Properties Income Trust, formerly Government Properties Income Trust, is a real estate investment trust ('REIT'). The Company operates through direct ownership of real estate properties segment that are primarily leased to government tenants. The Company's properties are located in areas, including Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey and New Mexico.