Medical Properties Trust Extends and Improves Leases to Prime Healthcare Services
Medical Properties Trust, Inc. (NYSE: MPW) today announced that it has restructured all of its 10 existing leases with affiliates of Prime Healthcare Services into a master lease structure and simultaneously entered into cross-collateralization and cross default provisions concerning three mortgaged Prime hospitals. The master leased facilities have an investment value (original costs) to MPT of approximately $250 million.
The new master lease structure has a 10-year term with two 5-year extension options. The initial lease rate is generally consistent with the blended average of the prior lease agreements and 2012 revenue from the Prime leases will not materially differ from prior expectations. However, the annual escalators, which in the prior leases were limited, have been increased to reflect 100% of CPI increases, along with a minimum floor. Under the master lease structure, the performance of each of the prior individual leases is now secured by all of the real estate of all leased facilities, improving the credit profile of MPT's Prime investments.
MPT has also funded a new $100 million mortgage loan secured by the real property of the Centinela Hospital Medical Center, which was named as a “Top 100 Hospital” by Thomson Reuters earlier in 2012. The mortgage loan is also cross-defaulted to the master lease structure and two other hospitals previously mortgaged to MPT for a total loan amount of approximately $265 million.
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