HCP Leads U.K. Senior Unsecured Note Investment
HCP (NYSE: HCP) announced that it was the lead investor in £175 million of senior unsecured notes (the “Notes”) to be issued in connection with the acquisition of Four Seasons Health Care (“Four Seasons”). HCP will acquire Notes having an aggregate par value of £138.5 million at a discount for £136.8 million (approximately $214 million). The Notes represent a portion of the £825 million acquisition financing for Four Seasons, the largest elderly and specialist care provider in the United Kingdom with 445 care homes and 61 specialist care centers.
The Notes have a fixed coupon rate of 12.25% per annum, with original issue discount resulting in a yield to maturity of 12.5%. Terra Firma, a leading European private equity firm, will provide £345 million in equity financing, resulting in a loan-to-capitalization of 62% for the Notes. The Notes will be subordinate to approximately £390 million of other debt at closing, comprised of £350 million of senior secured debt and £40 million available to Four Seasons under a secured revolving credit facility. The Notes have an 8-year term and are non-callable for 4 years, subject to customary redemption provisions. The Note purchase is scheduled to settle on June 28, 2012, with the closing of the Four Seasons acquisition expected to occur no later than September 3, 2012. The issuer of the Notes is Elli Investments Limited.
“We are pleased to have had the opportunity to participate in this financing,” said Jay Flaherty, HCP's Chairman and Chief Executive Officer. “This accretive transaction represents the type of value-creating investment opportunities that HCP's strong balance sheet and healthcare relationships make possible.”
HCP, Inc. is a fully integrated real estate investment trust (REIT) that invests primarily in real estate serving the healthcare industry in the United States. The Company's portfolio of assets is diversified among five distinct sectors: senior housing, post-acute/skilled nursing, life science, medical office and hospitals. A publicly traded company since 1985, HCP: (i) was the first healthcare REIT selected to the S&P 500 index; (ii) has increased its dividend per share for 27 consecutive years; and (iii) is the only REIT included in the S&P 500 Dividend Aristocrats index. For more information regarding HCP, visit the Company's website at www.hcpi.com.
The statements contained in this release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include general economic conditions, the ability to complete the acquisition and offering, and the receipt of payments, including repayment of principal, on the senior unsecured notes. Some of these risks, and other risks, are described from time to time in HCP's Securities and Exchange Commission filings.
Timothy M. Schoen
Executive Vice President and Chief Financial Officer