Recently, Ventas Inc. (VTR) unveiled the pricing of $500 million senior notes offering. The move will help Ventas generate proceeds that will increase its financial flexibility, repay debt, meet working capital needs and finance acquisitions and investment moves.
Specifically, Ventas priced the public offering of $500 million aggregate principal amount of 2.700% senior notes due 2020 at 99.942% of the principal amount. The offering is expected to close on Mar 19, 2013 and the notes were issued by its operating partnership – Ventas Realty Limited Partnership and a wholly owned subsidiary – Ventas Capital Corporation.
Citigroup Inc. (C), Credit Agricole CIB, Jefferies and JPMorgan Chase & Co. (JPM) served as joint book-running managers for the notes offering.
Notably, as of Dec 31, 2012, Ventas had $541 million of borrowings outstanding under its unsecured revolving credit facility and $68 million of cash and cash equivalents. Moreover, at quarter-end, debt to total capitalization stood at 31% and net-debt-to-adjusted-pro-forma-EBITDA (earnings before interest, tax, depreciation and amortization) was 5.4x.
Of late, Ventas disclosed that it has established an “at-the-market” equity offering program. Under the program, the company has the option to sell up to a total of $750 million of its common stock.
We believe that Ventas’ focus on maintaining a balanced and flexible balance sheet with ample liquidity would enable it to operate efficiently, tide over the near term constraints and capitalize on potential acquisition and investment opportunities. This, in turn, would help augment its top line. Moreover, paying back of debt would reduce its interest expenses.
Ventas currently retains a Zacks Rank #3 (Hold). However, another REIT stock that is performing well and is worth a look includes Omega Healthcare Investors Inc. (OHI), carrying a Zacks Rank #1 (Strong Buy).
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