BIRMINGHAM, Ala. - Medical Properties Trust, Inc. (NYSE: NYSE:MPW), a self-advised real estate investment trust, announced today the completion of an $800 million financing deal involving a selection of its U.K. hospital real estate assets. The non-recourse, non-amortizing secured financing was provided by a group of global institutional, insurance, and pension investors, led by European investment firm Song Capital.
The transaction encompasses 27 of the 36 facilities leased to Circle Health in the United Kingdom, with the loan-to-value ratio set in the low-40% range. This suggests a valuation increase of approximately 20% from when the majority of these properties were acquired by Medical Properties Trust around four years ago. The 10-year loan has a fixed cash pay rate of 6.9%, not including debt issuance costs.
Edward K. Aldag, Jr., Chairman, President, and CEO of Medical Properties Trust, highlighted the significance of this financial move, stating that the company has raised $2.4 billion in liquidity in the first five months of the year, surpassing its initial target of $2.0 billion. Aldag emphasized the favorable terms of the financing, which demonstrate the company's capability to secure long-term borrowing costs below market-implied rates and extend the duration of its debt maturities.
The proceeds from the financing are intended for debt repayment, including a £105 million secured term loan due in December 2024, borrowings under its revolving credit facility, and part of its GBP term loan maturing in early 2025. The funds will also support general corporate purposes.
Legal advisory for the transaction was provided to Medical Properties Trust by Goodwin Procter (UK) LLP, while Song Capital received counsel from Slaughter and May, CBRE, and Rothschild & Co.
Medical Properties Trust, established in 2003 in Birmingham, Alabama, has grown to become one of the world's largest owners of hospital real estate. As of March 31, 2024, the company owns 436 facilities with approximately 43,000 licensed beds across nine countries and three continents.
This announcement is based on a press release statement.
InvestingPro Insights
Medical Properties Trust, Inc. (MPW) has recently completed a substantial financing deal, which underscores the company's strategic financial management. According to InvestingPro data, MPW has a market capitalization of $3.03 billion, a notable figure that reflects its position in the market. Despite a challenging revenue growth of -47.28% over the last twelve months as of Q1 2024, the company boasts a high gross profit margin of 95.13%, indicating efficient cost management relative to its revenues.
In terms of shareholder returns, MPW presents a compelling dividend yield of 11.9%, which is particularly attractive for income-focused investors. Moreover, the company has a track record of maintaining dividend payments for 20 consecutive years, as highlighted in one of the InvestingPro Tips. This consistency in returning value to shareholders may offer some reassurance about the company's commitment to its dividend policy, even in volatile market conditions.
Another InvestingPro Tip points out that MPW is trading at a low Price / Book multiple of 0.44, suggesting that the stock may be undervalued compared to the company's book value. This metric, coupled with the significant dividend yield, could signal a potential opportunity for investors seeking value plays with income generation.
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