Ventas Enhances Liquidity

Zacks

Ventas Inc (VTR), one of the leading healthcare real estate investment trust (:REIT), announced that it has priced a public offering of $225 million worth 5.45% Senior Notes maturing in 2043. In addition, to cover any over-allotments, the company granted a 30-day option to the underwriters to purchase additional notes worth up to $33.75 million.

Ventas Realty and Ventas Capital Corporation – the company’s operating partnership and wholly owned subsidiary, respectively – are primarily responsible for the senior notes offering. These companies have the right of redeeming the notes, either in part or wholly, on or after the closing date. The offering is projected to close on Mar 7, 2013, subject to customary closing conditions.

Ventas intends to use the net proceeds from the offering to pay off, in part or full, the debt outstanding under its unsecured revolving credit facility. The proceeds are also planned to be utilized for proposed significant investments and other general corporate purposes.

UBS Securities LLC, Wells Fargo Securities of Wells Fargo & Company (WFC), Morgan Stanley & Co. LLC of Morgan Stanley (MS) and Merrill Lynch, Pierce, Fenner & Smith Inc of Bank of America (BAC) acted as joint book-running managers for the notes offering.  

This public offering will enable the company to attain financial flexibility and position it favorably to pursue investment opportunities and acquisitions, which will go a long way in enhancing top-line growth.

Last month, Ventas reported better-than-expected fourth-quarter results with normalized funds from operations (:FFO) of 99 cents per share, beating the Zacks Consensus Estimate by a couple of cents and the year-ago number by 10 cents.

As of Dec 31, 2012, the company’s cash position stood at $68 million and it had $541 million of borrowings outstanding under its unsecured revolving credit facility.

Ventas currently has a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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