Orion Properties Inc. 8-K

What Happened

• Orion Properties Inc. announced on Feb. 17–18, 2026 that certain subsidiaries entered a Loan Extension and Modification Agreement for its $355.0 million CMBS loan and that the company replaced its prior $350.0 million revolver with a new $215.0 million senior secured revolving facility.
• The CMBS loan maturity was extended from Feb. 11, 2027 to Feb. 11, 2029, with two borrower extension options (to Feb. 11, 2030 and Aug. 11, 2030) subject to conditions and prepayment requirements. The loan’s fixed interest rate (4.971%) remains unchanged.
• The Original Revolving Facility was terminated and refinanced by the New Revolving Facility (maturity Feb. 18, 2028, with two six-month extension options). As of the new agreement date, Orion had $113.0 million outstanding and $102.0 million available under the new $215.0 million facility.

Key Details

• CMBS loan principal: $355.0 million (fixed 4.971%); $2.05 million partial prepayment made at closing (Feb. 17, 2026).
• Extension option prepayments: $2.5 million required for the one-year option; $10.0 million for the six-month option.
• All-purpose reserve: existing tenant/lease reserves of $37.7 million were pooled and Orion deposited an additional $7.74 million into the reserve (funded from revolver borrowings).
• Cash sweep and prepayment mechanics: Lender will sweep monthly excess cash from the 19 collateral properties — during the initial extension 50% of excess flows go to principal prepayment and 50% to the reserve; during further extensions 75% goes to prepay principal and 25% to the reserve (reserve caps: $15.0M and $5.0M).
• New revolver economics and collateral: $215.0M capacity, interest options (Daily/Term SOFR +2.75% or base rate +1.75%), first-priority mortgages on 28 properties, parent and subsidiary guarantees, and financial covenants (total debt/asset ≤0.60, adjusted EBITDA/fixed charges ≥1.50, tangible net worth ≥ $740.6M plus 75% of future equity proceeds, collateral availability and debt yield tests).

Why It Matters

• Liquidity and refinancing risk: Extending the CMBS loan maturity reduces near-term refinancing pressure on the 19-property loan, while the new revolver provides working capital but at a smaller commitment ($215M vs. prior $350M).
• Cash flow and shareholder distributions: The cash-sweep and required prepayments mean more property cash will be diverted to reserves and debt paydown rather than discretionary uses (including dividends), tightening available cash for the parent and subsidiaries.
• Leverage and lender control: The new revolver tightens lender protections (first-priority liens, guarantees, financial covenants and mandatory prepayments if idle cash exceeds $25M), which may limit the company’s flexibility until covenants are met and reserves draw down.

Keywords: CMBS loan extension, revolving credit, interest rate, maturity extension, loan modification, covenants, liquidity.