9 LOANS AND BORROWINGS (CONT'D) Loan covenants The majority of existing loans of Manulife US REIT contain a financial covenant which states that Manulife US REIT must at all times ensure and procure that the ratio of consolidated total unencumbered debt to consolidated total assets (the “Unencumbered Gearing Ratio”) for any measurement period (being a period of 12 months ending on the last day of each financial half-year of Manulife US REIT) is not more than 60:100. As announced on 18 July 2023, the Unencumbered Gearing Ratio as at 30 June 2023 was 60.2:100 as a result of the decline in valuation of investment properties and the breach of the financial covenant has triggered a cross default under all of the Group’s loan facilities and interest rate swaps. As part of the Master Restructuring Agreement, Manulife US REIT obtained a waiver of the breach in addition to an extension of all loan maturities of the existing facilities by one year, and a temporary amendment of financial covenants such that Unencumbered Gearing Ratio for any measurement period (being a period of 12 months ending on the last day of each financial year of Manulife US REIT) is not more than 80:100 and ratio of Consolidated EBITDA to Consolidated Interest Expense, as defined in the facility agreements, shall be no less than 1.5 times, till 31 December 2025, unless the Early Reinstatement Conditions are achieved earlier. The Group has complied with the amended financial covenants as at 31 December 2024 and expects to comply with these amended financial covenants for the next 12 months after the reporting date. As disclosed in Notes 2.3 and 6, along with the amended covenants mentioned above, Manulife US REIT is also required to meet the 2025 Net Proceeds Target by the Disposal Deadline. For details on the Group’s plans, progress and expectations in meeting the 2025 Net Proceeds Target, and the implications of not meeting the 2025 Net Proceeds Target, refer to Note 2.3. The outstanding principal, interest rate and maturity of the facilities as at 31 December 2024 and 31 December 2023 are as set forth below: 2024 2023 Nominal interest rate Year of maturity Face value Carrying amount Face value Carrying amount % US$’000 US$’000 US$’000 US$’000 Group and Trust Unsecured bank loans 1.88 - 6.33 (2023: 1.88 - 7.02) 2026 - 2028 608,014 605,480 758,380 752,904 RCF – (2023: 6.79) 2025 – – 30,320 30,320 Sponsor-Lender Loan 7.251 2029 137,000 136,651 137,000 137,000 Accrual for SponsorLender Loan exit premium – 3,821 − 99 745,014 745,952 925,700 920,323 1 Excludes amortisation of the exit premium. 172 | MANULIFE US REIT NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2024
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