6.9% Fixed Cash Pay Rate Demonstrates Access
to Capital and Enduring Value of Hospital Real Estate
Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE:
MPW) today announced the completion of approximately £631 million
($800 million) in new non-recourse, non-amortizing secured
financing backed by certain properties in its U.K. portfolio. The
lending group comprises a consortium of global institutional,
insurance and pension investors led by Song Capital, a European
real estate investment firm.
Edward K. Aldag, Jr., Chairman, President and Chief Executive
Officer said, “In the first five months of the year, we have raised
$2.4 billion of liquidity, comfortably exceeding our initial full
year liquidity target of $2.0 billion, as sophisticated third-party
investors continue to recognize the value embedded in our leading
portfolio of hospital real estate assets. The terms of this most
recent financing prove our ability to borrow at long-term fixed
costs well inside market-implied rates on our outstanding debt and
significantly extend the overall duration of our debt
maturities.”
The transaction includes 27 of the 36 facilities MPT leases to
Circle Health (“Circle”) in the U.K. and is being executed at a
conservatively underwritten loan-to-value ratio in the low-40%
range – implying an approximate 20% increase in value since MPT
acquired the majority of the underlying properties approximately
four years ago, even during a period of cap rate expansion and
rising interest rates. The loan carries a fixed cash pay rate of
6.9% over the 10-year term excluding debt issuance costs.
The Company intends to use the proceeds to repay outstanding
debt, including the Company’s £105 million secured term loan
maturing in December 2024, borrowings under its revolving credit
facility, and a portion of its GBP term loan maturing in early
2025, as well as for other general corporate purposes.
Goodwin Procter (UK) LLP acted as legal adviser for MPT.
Slaughter and May, CBRE and Rothschild & Co advised Song
Capital.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a self-advised real estate
investment trust formed in 2003 to acquire and develop net-leased
hospital facilities. From its inception in Birmingham, Alabama, the
Company has grown to become one of the world’s largest owners of
hospital real estate with 436 facilities and approximately 43,000
licensed beds in nine countries and across three continents as of
March 31, 2024. MPT’s financing model facilitates acquisitions and
recapitalizations and allows operators of hospitals to unlock the
value of their real estate assets to fund facility improvements,
technology upgrades and other investments in operations. For more
information, please visit the Company’s website at
www.medicalpropertiestrust.com.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can generally be identified by
the use of forward-looking words such as “may”, “will”, “would”,
“could”, “expect”, “intend”, “plan”, “estimate”, “target”,
“anticipate”, “believe”, “objectives”, “outlook”, “guidance” or
other similar words, and include statements regarding our
strategies, objectives, future expansion and development
activities, asset sales and other liquidity transactions, expected
returns on investments and expected financial performance.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results or future events to
differ materially from those expressed in or underlying such
forward-looking statements, including, but not limited to: (i) the
risk that Steward’s bankruptcy restructuring does not result in MPT
recovering deferred rent or its other investments in Steward at
full value, within a reasonable time period or at all; (ii)
macroeconomic conditions, including due to geopolitical conditions
and instability, which may lead to a disruption of or lack of
access to the capital markets, disruptions and instability in the
banking and financial services industries, rising inflation and
movements in currency exchange rates; (iii) the risk that
previously announced or contemplated property sales, loan
repayments, and other capital recycling transactions do not occur
as anticipated or at all; (iv) the risk that MPT is not able to
attain its leverage, liquidity and cost of capital objectives
within a reasonable time period or at all; (v) MPT’s ability to
obtain debt financing on attractive terms or at all, as a result of
changes in interest rates and other factors, which may adversely
impact its ability to pay down, refinance, restructure or extend
its indebtedness as it becomes due, or pursue acquisition and
development opportunities; (vi) the ability of our tenants,
operators and borrowers to satisfy their obligations under their
respective contractual arrangements with us; (vii) the economic,
political and social impact of, and uncertainty relating to, the
potential impact from health crises (like COVID-19), which may
adversely affect MPT’s and its tenants’ business, financial
condition, results of operations and liquidity; (viii) our success
in implementing our business strategy and our ability to identify,
underwrite, finance, consummate and integrate acquisitions and
investments; (ix) the nature and extent of our current and future
competition; (x) international, national and local economic, real
estate and other market conditions, which may negatively impact,
among other things, the financial condition of our tenants, lenders
and institutions that hold our cash balances, and may expose us to
increased risks of default by these parties; (xi) factors affecting
the real estate industry generally or the healthcare real estate
industry in particular; (xii) our ability to maintain our status as
a REIT for income tax purposes in the U.S. and U.K.; (xiii) federal
and state healthcare and other regulatory requirements, as well as
those in the foreign jurisdictions where we own properties; (xiv)
the value of our real estate assets, which may limit our ability to
dispose of assets at attractive prices or obtain or maintain equity
or debt financing secured by our properties or on an unsecured
basis; (xv) the ability of our tenants and operators to operate
profitably and generate positive cash flow, remain solvent, comply
with applicable laws, rules and regulations in the operation of our
properties, to deliver high-quality services, to attract and retain
qualified personnel and to attract patients; (xvi) potential
environmental contingencies and other liabilities; (xvii) the risk
that the expected sale of three Connecticut hospitals currently
leased to Prospect does not occur at the agreed upon terms or at
all; (xviii) the risk that MPT is unable to monetize its investment
in Prospect at full value within a reasonable time period or at
all; (xix) the cooperation of our joint venture partners, including
adverse developments affecting the financial health of such joint
venture partners or the joint venture itself; (xx) the risks and
uncertainties of litigation or other regulatory proceedings; (xxi)
the risk that the completion and filing of the Company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2024 (the
“Quarterly Report”) will take longer than expected, including the
risk that additional information may arise during its preparation;
and (xxii) the timing of the Company regaining compliance with the
NYSE’s continued listing standards.
The risks described above are not exhaustive and additional
factors could adversely affect our business and financial
performance, including the risk factors discussed under the section
captioned “Risk Factors” in our most recent Annual Report on Form
10-K, as may be updated in our other filings with the SEC.
Forward-looking statements are inherently uncertain and actual
performance or outcomes may vary materially from any
forward-looking statements and the assumptions on which those
statements are based. Readers are cautioned to not place undue
reliance on forward-looking statements as predictions of future
events. We disclaim any responsibility to update such
forward-looking statements, which speak only as of the date on
which they were made.
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version on businesswire.com: https://www.businesswire.com/news/home/20240523572008/en/
Drew Babin, CFA, CMA Senior Managing Director of Corporate
Communications Medical Properties Trust, Inc. (646) 884-9809
dbabin@medicalpropertiestrust.com
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