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.
“We are extremely pleased with the significant additional capacity and favorable terms provided by the new unsecured credit facility,” stated Taylor Pickett, Omega’s President and CEO. Mr. Pickett added, “Our banks have been terrific business partners as we have continued to grow our portfolio. We are particularly appreciative of their recognition of Omega’s credit quality, financial strength, and conservative balance sheet management.”The 2014 Credit Facilities were made up of a syndication of financial institutions. Merrill Lynch, Pierce, Fenner & Smith Incorporated was Joint Lead Arranger and Sole Book Runner. Bank of America, N.A. was the Administrative Agent. Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and J.P. Morgan Securities LLC were Joint Lead Arrangers and Co-Syndication Agents. The Bank of Tokyo-Mitsubishi UFJ, Ltd., Capital One, National Association, Morgan Stanley Bank, N.A., Royal Bank of Canada, SunTrust Bank, Branch Banking and Trust Company, Sumitomo Mitsui Banking Corporation, Stifel Bank & Trust, Synovus Bank, Bank of Taiwan, Mega International Commercial Bank Co., Ltd., Land Bank of Taiwan, Taiwan Business Bank, Taiwan Cooperative Bank, Ltd., First Commercial Bank, Ltd., E. Sun Commercial Bank, Limited and Hua Nan Commercial Bank Ltd. also participated in the 2014 Credit Facilities. Omega also announced today that during the three months ended June 30, 2014, it closed on $315 million in incremental new investments. The investments include a new $415 million mortgage (which expands and replaces an existing $117 million mortgage) and $17 million in new skilled nursing facility triple net lease investments. All of the second quarter investments are with existing Omega operators. The Company is a real estate investment trust investing in and providing financing to the long-term care industry. At June 30, 2014, the Company owned or held mortgages on 563 skilled nursing facilities, assisted living facilities and other specialty hospitals with approximately 63,796 licensed beds (61,425 available beds) located in 37 states and operated by 49 third-party healthcare operating companies.
This announcement includes forward-looking statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of the Company’s properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector; (iii) changes in the financial position of the Company’s operators; (iv) the ability of any of the Company’s operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company’s mortgages and impede the ability of the Company to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; (v) the availability and cost of capital; (vi) changes in the Company’s credit ratings and the ratings of its debt securities; (vii) competition in the financing of healthcare facilities; (viii) the Company’s ability to maintain its status as a real estate investment trust; (ix) the Company’s ability to manage, re-lease or sell any owned and operated facilities; (x) the Company’s ability to sell closed or foreclosed assets on a timely basis and on terms that allow the Company to realize the carrying value of these assets; (xi) the effect of economic and market conditions generally, and particularly in the healthcare industry; and (xii) other factors identified in the Company’s filings with the Securities and Exchange Commission. Statements regarding future events and developments and the Company’s future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements. The Company undertakes no obligation to update any forward-looking statements contained in this announcement.