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Ventas Offers 8.5 Million Shares, $200m Notes

The Associated Press

CHICAGO (AP) — Real estate investment trust Ventas Inc. said Monday it plans to offer 8.5 million shares of common stock and $200 million of senior notes to boost liquidity and strengthen its balance sheet.

The proceeds will be used to pay down or repurchase its debt and for general corporate purposes, the company said in a statement.

The notes due 2016 will be issued by the company's operating partnership Ventas Realty and a wholly owned subsidiary, Ventas Capital Corp. The company also said it has commenced tender offers up to $310 million to purchase outstanding senior notes due in 2010, 2012, 2014 and 2015 issued by the two business units.

The company expects the transactions, if completed, to be modestly dilutive to its estimated funds from operations per share, but that the opportunity to limit or eliminate near term debt maturities should benefit all of its stakeholders.

The company said it expects its 2009 normalized funds from operations to be between $2.55 and $2.65 per share, confirming guidance offered in early February.

Its guidance for funds from operations, or FFO, is "normalized," meaning it excludes items such as gains and losses on the sale of assets, impact of future transactions, costs, expenses and write-offs.

FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for REITs because it provides a more accurate picture of cash performance.

Analysts expect FFO to be of $2.61 per share. Analysts typically exclude one-time items from their estimates.

Ventas shares fell 62 cents, or 2.4 percent, to close at $25.42.

The company owns seniors housing communities, skilled nursing facilities, hospitals, medical office buildings and other properties in 43 states and two Canadian provinces.