HUNT VALLEY, Md.--(BUSINESS WIRE)--New and Amended Credit Facilities. Omega Healthcare Investors, Inc. (NYSE:OHI) today announced that it has entered into (a) a new $1.8 billion senior unsecured revolving and term loan credit facility, comprised of a $1.25 billion senior unsecured multicurrency revolving credit facility (the “Revolving Credit Facility”), a $425 million U.S. Dollar senior unsecured term loan facility (the “U.S. Dollar Term Loan Facility”), and a £100 million Pounds Sterling senior unsecured term loan facility (the “Sterling Term Loan Facility” and, together with the Revolving Credit Facility and the U.S. Dollar Term Loan Facility, collectively, the “REIT Credit Facilities”) and (b) an amended and restated $250 million senior unsecured term loan credit facility (the “Amended and Restated Term Loan”). In addition, Omega also announced that its subsidiary, OHI Healthcare Properties Limited Partnership (“OHI LP”), has entered into a new $100 million senior unsecured term loan credit facility (the “OHI LP Credit Facility”). Each of the new and amended credit facilities were effective May 25, 2017. The overall syndication of the REIT Credit Facilities and the OHI LP Credit Facility raised commitments of over $2.8 billion.
The REIT Credit Facilities replace Omega’s previous $2 billion senior unsecured revolving credit and term loan credit facility (the “2014 Credit Facility”), part of which (a $200 million term loan due June 27, 2017) was previously repaid from proceeds of Omega’s $700 million senior notes offering in April 2017. The REIT Credit Facilities include an “accordion feature” that permits the Company to expand its borrowing capacity to an aggregate of not more than $2.5 billion.
The Amended and Restated Term Loan amends and restates Omega’s previous $250 million senior unsecured term loan credit facility (the “2015 Term Loan”) to implement certain modifications to the terms and conditions similar to those now in the REIT Credit Facilities and the OHI LP Credit Facility.
The OHI LP Credit Facility replaces OHI LP’s previous $100 million senior unsecured term loan credit facility (the “2015 OHI LP Credit Facility”).
The Revolving Credit Facility is priced at LIBOR plus an applicable percentage (currently at 125 basis points, with a range of 87.5 to 165 basis points) based on the Company’s ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings, plus a facility fee based on the same ratings (currently 25 basis points, with a range of 12.5 to 30 basis points). The Revolving Credit Facility will be used for (a) refinancing existing indebtedness, (b) financing acquisitions, and (c) funding working capital, capital expenditures and other general corporate purposes. At May 25, 2017, the Company had $333 million in borrowings outstanding under the Revolving Credit Facility, of which $100 million was repaid on May 26, 2017. The Revolving Credit Facility matures in four years, on May 25, 2021, with two options by the Company to extend the maturity six additional months for each option.
The U.S. Dollar Term Loan Facility, the Sterling Term Loan Facility, and the OHI LP Credit Facility are each priced at LIBOR plus an applicable percentage (currently at 145 basis points, with a range of 90 to 190 basis points) based on the Company’s ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings. The U.S. Dollar Term Loan Facility, the Sterling Term Loan Facility, and the OHI LP Credit Facility each mature in five years, on May 25, 2022, and will be used to refinance existing indebtedness.
Neither the Company nor OHI LP experienced any material early termination penalties due to the termination of the 2014 Credit Facility and the 2015 OHI LP Credit Facility in connection with the effectiveness of the REIT Credit Facilities and the OHI LP Credit Facility. For the three month period ending June 30, 2017, the Company expects to record a one-time, non-cash charge of approximately $5.5 million relating to the write-off of deferred financing costs associated with the termination of the 2014 Credit Facility.
The REIT Credit Facilities are made up of a syndication of financial institutions. Merrill Lynch, Pierce, Fenner & Smith Incorporated is Joint Lead Arranger and Sole Book Runner. Bank of America, N.A. is the Administrative Agent. Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and JPMorgan Chase Bank, N.A. are Joint Lead Arrangers and Co-Syndication Agents. The Bank of Tokyo-Mitsubishi UFJ, Ltd., Compass Bank, Royal Bank of Canada, The Bank of Nova Scotia, SunTrust Bank, Wells Fargo Bank, N.A., Capital One, National Association, Morgan Stanley Bank, N.A., Branch Banking and Trust Company, Regions Bank, Bank of the West, Fifth Third Bank, Sumitomo Mitsui Banking Corporation, The Huntington National Bank, Stifel Bank & Trust, Synovus Bank, , Bank of Taiwan, First Commercial Bank, Ltd., Land Bank of Taiwan, Taiwan Business Bank, E. Sun Commercial Bank Limited, Hua Nan Commercial Bank Ltd., Mega International Commercial Bank Co., Ltd. and Taiwan Cooperative Bank also participate in the REIT Credit Facilities.
The OHI LP Credit Facility is made up of a syndication of financial institutions. Merrill Lynch, Pierce, Fenner & Smith Incorporated is Joint Lead Arranger and Sole Book Runner. Bank of America, N.A. is the Administrative Agent. Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and JPMorgan Chase Bank, N.A. are Joint Lead Arrangers and Co-Syndication Agents. The Bank of Tokyo-Mitsubishi UFJ, Ltd., Royal Bank of Canada, SunTrust Bank, Wells Fargo Bank, N.A., Capital One, National Association and Morgan Stanley Bank, N.A. also participate in the OHI LP Credit Facility.
United Kingdom (“UK”) Transaction. Omega also announced the completion of an acquisition and lease transaction with Gold Care Homes, a provider of care home services to the elderly in the UK. The transaction, which closed on May 11, 2017, for approximately $113 million, included 18 UK-based care home facilities and continues Omega’s expansion in the UK. Gold Care Homes is the second care home operator to be backed by Omega in the UK and this transaction follows similar transactions involving 35 care home facilities with its other UK care home operator, Healthcare Homes Group. Omega has now acquired a total of 53 care home facilities in the UK.
Signature Holdings II LLC. Recent media coverage relating to one of Omega’s operators, Signature Holdings II LLC, inaccurately reported that Omega had engaged Alvarez & Marsal as a financial adviser in relation to matters involving Omega’s Signature Holdings II LLC-operated facilities.
“While we do not provide financial information regarding our specific operators, the media report that we retained a financial adviser with regard to our facilities operated by Signature is simply false. We have a large and diverse portfolio comprised of approximately 1,000 properties located in 42 states and the UK and operated by 77 different operators. No single operator comprises more than 10% of our total portfolio based on rent and this diversification minimizes the potential for an adverse impact associated with any single operator encountering financial difficulties. Our management team has repeatedly demonstrated the ability to effectively address and resolve issues encountered by our operators and Omega’s credit quality, financial strength, and conservative balance sheet management are reflected in the favorable terms of the REIT Credit Facilities and the OHI LP Credit Facility,” stated Taylor Pickett, Omega’s President and CEO.
Omega is a real estate investment trust investing in and providing financing to the long-term care industry. As of March 31, 2017, Omega has a portfolio of investments that includes approximately 1,000 properties located in 42 states and the United Kingdom and operated by 77 different operators.
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Omega’s or its tenants’, operators’, borrowers’ or managers’ expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger integration, growth opportunities, expected lease income, continued qualification as a REIT, plans and objectives of management for future operations and statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will” and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from Omega’s expectations. Omega does not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.
Omega’s actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of Omega’s properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector; (iii) changes in the financial position of Omega’s operators; (iv) the ability of any of Omega’s operators in bankruptcy to reject unexpired lease obligations, modify the terms of Omega’s mortgages and impede the ability of to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; (v) the availability and cost of capital; (vi) changes in Omega’s credit ratings and the ratings of its debt securities; (vii) competition in the financing of healthcare facilities; (viii) Omega’s ability to maintain its status as a REIT; (ix) Omega’s ability to manage, re-lease or sell any owned and operated facilities, if any; (x) Omega’s ability to sell closed or foreclosed assets on a timely basis and on terms that allow Omega to realize the carrying value of these assets; (xi) the effect of economic and market conditions generally, and particularly in the healthcare industry; (xii) the potential impact of changes in the skilled nursing facility and assisted living facility markets or local real estate conditions on the Company’s ability to dispose of assets held for sale for the anticipated proceeds or on a timely basis, or to redeploy the proceeds therefrom on favorable terms; and (xiii) other factors identified in Omega’s filings with the SEC. Statements regarding future events and developments and Omega’s future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward looking statements. Omega undertakes no obligation to update any forward-looking statements contained in this announcement.