Company: HPP
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001482512-25-000043
Chunk: 71

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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secured interest expense≥ 1.75x2.0x  The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of March 31, 2025:Covenant Ratio(1)Covenant LevelActual PerformanceDebt to total assets≤ 60%45.9%Total unencumbered assets to unsecured debt ≥ 150%247.2%Consolidated income available for debt service to annual debt service charge≥ 1.5x1.7x Secured debt to total assets≤ 45%23.1%_________________1.The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the 3.25% Senior Notes, 3.95% Senior Notes, 4.65% Senior Notes and 5.95% Senior Notes.The operating partnership was in compliance with its financial covenants as of March 31, 2025.Repayment GuaranteesAlthough the rest of the operating partnership’s loans are secured and non-recourse, the operating partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities.The Company and certain of its subsidiaries guarantee the operating partnership’s unsecured debt. The likelihood of loss relating to this guarantee is remote as of March 31, 2025.Interest ExpenseThe following table represents a reconciliation from gross interest expense to interest expense on the Consolidated Statements of Operations:Three Months Ended March 31,20252024Gross interest expense(1)$49,127 $50,656 Capitalized interest(10,080)(8,482)Non-cash interest expense(2)4,458 1,915 INTEREST EXPENSE$43,505 $44,089 _________________1.Includes interest on the Company’s debt and hedging activities.2.Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives.

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Table of ContentsHudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.Notes to Unaudited Consolidated Financial Statements(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

10. Derivatives

The Company enters into derivatives in order to hedge interest rate risk. Derivative assets are recorded in prepaid expenses and other assets and derivative liabilities are recorded in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets.The Company has