Omega Healthcare Investors, Inc. (NYSE:OHI) today announced that it has entered into a new $1.2 billion unsecured credit facility, comprised of a $1 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $200 million unsecured term loan facility (the “Term Loan Facility” and, collectively, the “2014 Credit Facilities”) effective June 27, 2014.
The 2014 Credit Facilities replace Omega’s previous $700 million senior unsecured credit facility (the “2012 Credit Facility”). The 2014 Credit Facilities include an “accordion feature” that permits the Company to expand its borrowing capacity by $550 million, to a total of $1.75 billion.
The Revolving Credit Facility is priced at LIBOR plus an applicable percentage (beginning at 130 basis points, with a range of 92.5 to 170 basis points) based on the Company’s ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings, plus a facility fee based on the same ratings (initially 25 basis points, with a range of 12.5 to 30 basis points). The Revolving Credit Facility will be used for acquisitions and general corporate purposes. At June 30, 2014, the Company had $270 million in borrowings outstanding under the Revolving Credit Facility. The Revolving Credit Facility matures in four years, on June 27, 2018, with an option by the Company to extend the maturity one additional year.
The Term Loan Facility is also priced at LIBOR plus an applicable percentage (beginning at 150 basis points, with a range of 100 to 195 basis points) based on the Company’s ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings. The Term Loan Facility matures in five years, on June 27, 2019.
The Company and its subsidiaries terminated the 2012 Credit Facility in connection with the effectiveness of the 2014 Credit Facilities. The Company did not experience any material early termination penalties due to the termination of the 2012 Credit Facility. For the three month period ending June 30, 2014, the Company will record a one-time, non-cash charge of approximately $2.6 million relating to the write-off of deferred financing costs associated with the termination of the 2012 Credit Facility.