Medical Properties Trust has completed a new £631m loan secured against a portfolio of its UK hospitals.
The lending group for the new 10-year facility includes a consortium of global institutional, insurance and pension investors led by Song Capital, a European real estate investment firm.
The transaction includes 27 of the 36 facilities Medical Properties Trust leases to Circle Health in the UK and is being executed at an underwritten loan-to-value ratio in the low-40% range – implying an approximate 20% increase in value since MPT acquired the majority of the underlying properties four years ago.
The loan carries a fixed cash pay rate of 6.9% over the 10-year term excluding debt issuance costs.
MPT said it intended to use the proceeds from the loan to repay outstanding debt, including its £105m secured term loan maturing in December 2024, borrowings under its revolving credit facility, and a portion of its GBP term loan maturing in early 2025, as well as for other general corporate purposes.
Edward Aldag, chairman, president and chief executive at MPT, said: “In the first five months of the year, we have raised $2.4bn of liquidity, comfortably exceeding our initial full-year liquidity target of $2bn, as sophisticated third-party investors continue to recognise the value embedded in our leading portfolio of hospital real estate assets.
“The terms of this most recent financing prove our ability to borrow at long-term fixed costs well inside market-implied rates on our outstanding debt and significantly extend the overall duration of our debt maturities.”
Goodwin Procter acted as legal adviser for MPT. Slaughter and May, CBRE and Rothschild & Co advised Song Capital.
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