NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 9 LOANS AND BORROWINGS Group and Trust 2025 2024 US$’000 US$’000 Current Unsecured bank loans 35,554 − Less: Unamortised transaction costs (85) − 35,469 − Non-current Unsecured bank loans 341,962 608,014 Unsecured bank loan due to a related party 44,498 − Unsecured Sponsor-Lender Loan 137,000 137,000 Accrual for Sponsor-Lender Loan exit premium 7,945 3,821 Less: Unamortised transaction costs (2,188) (2,883) 529,217 745,952 564,686 745,952 The Property Funds Appendix states that the aggregate leverage limit is not considered to be breached if exceeding the limit is due to circumstances beyond the control of the Manager. As a decline in the valuation of investment properties has resulted in the aggregate leverage of Manulife US REIT exceeding 50%, there is no breach of the aggregate leverage limit as defined by the Property Funds Appendix. As at 31 December 2025, the Group had gross borrowings of US$559.0 million (2024: US$745.0 million), an aggregate leverage ratio of 58.4% (2024: 60.8%) and interest coverage ratio (“ICR”) of 1.7 times (2024: 1.7 times). 74.6% of the gross borrowings have fixed interest rates or have been hedged (2024: 69.4%), which reduces short-term cash flow volatility from floating interest rate movements. The weighted average interest rate on borrowings as at 31 December 2025 was 4.58% (2024: 4.53%) per annum, and the weighted average debt maturity was 2.3 years (31 December 2024: 2.9 years). Including the exit premium on the Sponsor-Lender Loan, the weighted average interest rate on borrowings as at 31 December 2025 was 5.25% (2024: 5.03%). All of the Group’s properties are unencumbered as at 31 December 2025 and 31 December 2024. Loans and borrowings due to related parties Pursuant to the Recapitalisation Plan, the approval of the resolutions during the extraordinary general meeting held on 14 December 2023, and the Master Restructuring Agreement, the Sponsor granted an unsecured loan of US$137.0 million for a period of six-years at an interest rate of 7.25% paid quarterly (the “Sponsor-Lender Loan”) with an exit premium of up to 21.16%. During the financial year ended 31 December 2025, an unrelated bank lender of Manulife US REIT transferred its remaining loan balance of US$44.5 million to a related entity of the Sponsor. / 128 / EXPANDING HORIZONS
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