Omega Healthcare (NYSE:OHI) Investors Inc. (NYSE:OHI) has established a new "at-the-market" equity offering sales agreement, allowing the company to issue and sell shares up to a gross sales price of $1.25 billion. The agreement, effective today, replaces a previous arrangement set up in May 2021.
Under the terms of the new sales agreement, Omega may issue shares of common stock, referred to as Issuance Shares, or engage in forward sale agreements with Forward Purchasers. The latter would involve the Forward Purchasers, through Forward Sellers, selling borrowed shares of common stock, known as Forward Shares. The combined total of Issuance Shares and Forward Shares sold will not exceed the $1.25 billion cap.
The company may, at its discretion, settle the forward sale agreements by delivering common stock or elect to settle in cash or through net share settlement. The settlement of these agreements is expected to occur within two years from the date of each agreement, although the company reserves the right to settle earlier under certain conditions.
Sales of Issuance Shares may be conducted through Sales Agents or directly to them as principals, at negotiated prices. The compensation for Sales Agents will not exceed 2.0% of the gross sales price per share. Similarly, Forward Sellers will receive commissions in the form of a reduced initial forward sale price, also capped at 2.0%.
Omega Healthcare, which operates as a real estate investment trust (REIT) within the healthcare sector, has indicated that it has no obligation to sell any securities under the agreement and can suspend sales at any time.
In other recent news, Omega Healthcare Investors has exceeded Q2 expectations, reporting a Funds Available for Distribution (FAD) of $0.68 per share and raising its 2024 Adjusted Funds From Operations (AFFO) guidance to between $2.78 and $2.84 per share. The company's Q2 revenue was $253 million, a slight increase from $250 million in the previous year.
In addition, Truist Securities adjusted its price target for Omega Healthcare, increasing it to $39.00 from the previous $33.00, while Baird maintained a Neutral rating but raised its price target to $35 from $32.
These revisions were influenced by higher than anticipated rent collections and improved visibility for external growth. Omega Healthcare also acquired a 100% interest in a joint venture, which includes $243 million in secured debt to be repaid in November 2025.
Despite challenges, such as one of Omega's operators filing for Chapter 11 bankruptcy protection, the company remains optimistic about its future. These developments illustrate the recent progress and strategic moves made by Omega Healthcare.
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