In an effort to increase its financial flexibility, Senior Housing Properties Trust (SNH), a real estate investment trust (:REIT), disclosed the amendment of its existing $750 million unsecured revolving credit facility.
For Senior Housing, which exited second-quarter 2013 with cash and cash equivalents of $37.3 million, the move helped it extend its maturity term and incur lower cost of capital. We believe this will help the company in promoting its growth plans.
Particularly, the amendment extended the maturity date to Jan 15, 2018 from Jun 24, 2015. Moreover, the interest paid on drawings has been reduced to LIBOR plus 130 basis points (bps) from LIBOR plus 160 bps. This is, however, subject to changes depending on the company’s credit rating.
Also, the fee on the credit facility got lowered by 5 bps to 30 bps per annum. Further, the unsecured revolving credit facility is extendable by an additional year and the borrowing amount can be increased up to $1.5 billion under certain situations.
A consortium of 17 banking majors supported Senior Housing in the amended credit facility. Among these were Wells Fargo Bank, N.A. of Wells Fargo & Company (WFC) acting as the administrative agent, Citigroup N.A. of Citigroup Inc. (C) serving as the syndication agent and Bank of America, N.A. of Bank of America Corporation (BAC) as the documentation agent.
Newton, Mass.-based Senior Housing has one of the most diversified portfolios in the healthcare sector with exposure to nearly all types of facilities. The company leases some of its owned healthcare related and senior housing facilities to third-party operators under "triple net" leases, under which the tenant pays all taxes, insurance, and maintenance for the properties, in addition to rent. As of Jun 30, 2013, the company owned 395 properties in 40 states and Washington.
Senior Housing currently has a Zacks Rank #4 (Sell).
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