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$HY Office REIT (OPI) cuts dividend; bonds rally; faces $350m May bond refi risk

CREDIT UPDATE

$HY office REIT {OPI US Equity} (Caa1 Neg, CCC+ Neg) disappoints on dividend (1c/common share this qtr vs. 25c/ common share last qtr) - boosting liquidity by $47/m/yr -short-end '24-27's are 20-30c richer today - $350m May 4.25% 24's (iss. at $98.7) facing >15% yields in secondary (31's/tightest trade there)

"Given the deterioration in market conditions since we last addressed our dividend rate in the first half of 2023, we believe it is prudent to further reduce the dividend to increase our liquidity and financial flexibility when addressing future leasing costs, capital expenditures and debt maturities, This new dividend rate will immediately increase OPI’s liquidity by approximately $47 million per year as well as increase liquidity by approximately $105 million per year as compared to the dividend rate paid in Q1 2023.”" - Chief Operating Officer Yael Duffy.

OPI last reported (3Q, Oct 30) $24m in cash and $550m remaining headroom in a $750m revolver. Full press release; https://www.opireit.com/investors/news/news-releas...

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