MOB Finance Activity: Medical Properties Trust Closes $1.7 Billion Credit Facility

Medical Properties Trust Announces Closing of $1.7 Billion Credit Facility

Birmingham, Alabama-based self-advised real estate investment trust (REIT) Medical Properties Trust, Inc. (NYSE: MPW) recently announced that its subsidiary, MPT Operating Partnership L.P., has closed a new $1.7 billion senior unsecured credit facility. The credit facility is made up of a $1.3 billion senior unsecured revolving credit facility initially priced at 125 basis points over LIBOR, a €200 million senior unsecured term loan denominated in euros priced at 150 basis points over LIBOR and a $200 million senior unsecured term loan denominated in dollars priced at 150 basis points over LIBOR. The credit facility replaces the borrower’s existing $1.3 billion senior unsecured revolving credit facility and $250 million unsecured term loan, according to a press release.

The borrower anticipates using the proceeds of the EUR Term Loan together with cash on hand to redeem its €200 million 5.750% senior notes due 2020, including premium and accrued and unpaid interest thereon.

The revolver matures in 2021 and can be extended for an extra year at the borrower’s option. The USD Term Loan matures in 2022, and the EUR Term Loan matures in 2020 and can be extended for one more year. The credit facility has an accordion feature that enables the borrower to expand the size of the facility by as much as $500 million through increases to the revolver and USD Term Loan, both or as a separate term loan tranche. The credit facility also permits the borrower to borrow as much as €650 million in alternative currencies, including pounds and euros.

“This credit facility is another indication of our strong financial position and financial flexibility,” Edward K. Aldag, Jr., chairman, president and CEO, said in a press release. “The improvement in pricing and the addition of the euro term loan and additional term loan gives us increased flexibility in the capital markets. We are very pleased with the continued support from our capital providers.”

The credit facility was arranged by JP Morgan Chase Bank, N.A. and Merrill Lynch Pierce, Fenner & Smith Incorporated as joint lead arrangers and bookrunners. Barclays Bank PLC, Goldman Sachs Bank USA and KeyBank National Association acted as joint lead arrangers. Bank of America, N.A. acted as the syndication agent and JPMorgan Chase Bank, N.A. is serving as the administrative agent. Goldman Sachs Bank USA, Barclays Bank PLC, Keybank National Association, Citizens Bank, N.A., Compass Bank, Credit Agricole Corporate and Investment Bank, Credit Suisse AG, Royal Bank of Canada, SunTrust Bank, Cayman Islands Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd, and Wells Fargo Bank, National Association served as documentation agents. First Tennessee Bank, N.A., The Bank of Nova Scotia and Cadence Bank also participated in the credit facility.

Capital One Arranges $534.9 Million Loan to Finance Starwood’s Medical Office Portfolio Purchase

Capital One Healthcare recently arranged a $534.9 million loan to fund Starwood Property Trust’s (NYSE: STWD) purchase of a 1.9 million-square-foot, 34-property medical office portfolio across 12 states.

The purchase price and the seller were not disclosed.

The portfolio includes properties in Colorado, California, Florida, Georgia, Indiana, Illinois, New York, New Jersey, Nevada, North Carolina, Texas and Tennessee.

“This strategic acquisition provides us with a safe, resilient income stream and the opportunity to participate in the stable long-term growth of the medical office building sector,” Starwood Property Trust Chairman and CEO Barry Sternlicht said.

Ziegler Closes $30.2 Million Refinancing of Acute Care Hospital in Alabama

Chicago-based specialty investment bank Ziegler recently announced it successfully closed a $30,178,500 refinancing of an 81-bed not-for-profit acute care hospital in Alexander City, Alabama. The deal was closed by Ziegler Financing Corporation (ZFC), the FHA-insured mortgage lending arm of Ziegler.

Russell Medical Center had about $30.1 million in outstanding tax-exempt bond debt with an average interest rate of 5.7%. ZFC’s experience with HUD programs available to health care systems created value for the borrower by recapitalizing the hospital and lowering RMC’s annual debt service costs by as much as $575,000. The Section 242/223(f) mortgage loan has a 25-year term and led to a note rate of less than 4.0%.

“With this refinancing, we were able to significantly lower our debt service which will provide a solid foundation for RMC’s future growth in the ever-changing healthcare environment,” Jim Peace, CEO of Russell Medical Center, said in a press release. “The Ziegler team did a great job helping us navigate the HUD process.”

Medical Office Plaza Refinanced in Arizona

JLL’s Capital Markets recently completed a $10.5 million refinancing for an eight-building medical office plaza in Paradise Valley, Arizona, on behalf of Bayport PV Associated LP, AZ Big Media reported.

Principal Real Estate Investors provided the 10-year, fixed-rate loan for Paradise Valley Medical Plaza, which is fully occupied. The medical office buildings are anchored by an outpatient surgery center and leased to 16 tenants.

JLL was able to rate lock in September 2016 with an interest rate of 3.62%. Senior Associate Alex Kane and Managing Director Brian Halpern led the JLL team on the deal.

Tremont Realty Capital Structures $16.25 Million Financing for Medical Office in Florida

Tremont Realty Capital, a division of The RMR Group LLC, recently announced that it has structured $16.25 million in refinancing capital for a multi-tenant, 132,488-square-foot medical office complex in Jacksonville, Florida.

The non-recourse, CMBS financing represented about 75% of appraised value of the property and has a 10-year fixed annual interest rate of 5.26%, as well as a 30-year amortization schedule.

“Through our extensive network, we identified a capital provider that understood Jacksonville Medical Plaza’s situation – with its complex borrower structure and existing ground lease – and structured a long-term loan with a long fixed interest rate period to refinance the property’s maturing bank debt,” Stephen Henderson, director of capital markets for Tremont, said in a press release. “This financing transaction underscores Tremont Realty Capital’s position at the nexus between borrowers and lenders, providing well executed and timely solutions across a range of property types, funding scenarios and geographies. Our team has the relationships and the industry experience to serve as a trusted resource for both borrowers seeking capital, and the sponsors that can provide it.”

Cronheim Mortgage Closes $12.7 Million in Refinancing for Two Medical Office Buildings in Long Island

Cronheim Mortgage recently arranged $12.7 million in refinancing for two medical office buildings in Long Island, New York. Together, the buildings total 100,141 square feet.

The loan was structured with an initial five-year fixed-rate period locked at 3.875%, followed by an extension option of five years. Cronheim’s Janet Proscia, David Turley and Jeff Pacailler arranged the financing for an anonymous borrower.

Written by Mary Kate Nelson