HCP (NYSE:HCP) announced the closing of a £137 million unsecured term loan (the “Loan”) in connection with HCP’s recently completed £137 million ($215 million) investment in the senior unsecured notes (the “Investment”) of Four Seasons Health Care, the largest elderly and specialist care provider in the United Kingdom. The Investment has a fixed coupon rate of 12.25% per annum, with an original issue discount that results in a yield to maturity of 12.5%, matures in 2020 and is non-callable for four years.
The Loan has a four-year term with a one-year committed extension option and bears interest at GBP LIBOR plus 120 basis points. Concurrent with the closing of the Loan, we entered into a four-year interest rate swap agreement that fixes the rate of the Loan at 1.81%, subject to adjustments based on our credit ratings. The Loan repaid the £137 million outstanding balance on HCP’s $1.5 billion revolving credit facility that was initially used to purchase the Investment.
“We are pleased with the strong support from our existing bank syndicate for the pound sterling denominated term loan which provides a natural hedge with respect to the Four Seasons Health Care investment,” said Tim Schoen, HCP’s Executive Vice President and Chief Financial Officer.
Bank of America, N.A., serves as administrative agent with Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as syndication agent, Citibank, N.A., UBS AG, Stamford Branch and Wells Fargo Bank, N.A., as co-documentation agents, and a syndicate of banks, as lenders.
HCP, Inc. is a fully integrated real estate investment trust (REIT) that invests primarily in real estate serving the healthcare industry in the United States. The Company’s portfolio of assets is diversified among five distinct sectors: senior housing, post-acute/skilled nursing, life science, medical office and hospitals. A publicly traded company since 1985, HCP: (i) was the first healthcare REIT selected to the S&P 500 index; (ii) has increased its dividend per share for 27 consecutive years; and (iii) is the only REIT included in the S&P 500 Dividend Aristocrats index. For more information regarding HCP, visit the Company’s website at