Omega Healthcare Investors, Inc. (NYSE: OHI) (the “Company” or
“Omega”) announced that it has entered into a new two-year $400
million senior unsecured term loan (the “Term Loan”). The Term Loan
matures on August 8, 2025, with two options by the Company to
extend the maturity by 12 additional months for each option,
subject to certain conditions. The Term Loan includes an “accordion
feature” that permits the Company to expand its borrowing capacity
to an aggregate of up to $500 million.
The Term Loan will bear interest at a rate consistent with the
Company’s existing $50 million term loan equal to (a) Term or Daily
Simple SOFR plus a spread of between 0.85% and 1.85% or (b) the
base rate plus a spread between 0.00% and 0.85%, with each spread
determined based on the Company’s credit rating. The Company also
executed $400 million of variable-to-fixed interest rate swaps that
fix the Secured Overnight Financing Rate (“SOFR”) variable
component of the Term Loan at 4.015% for four years. Based on the
Company’s current ‘BBB-’ credit rating and giving effect to the
related swaps, the Term Loan will bear interest at an all-in fixed
rate of 5.565%. The entire amount of the Term Loan will be funded
on August 14, 2023, concurrent with the starting of the forward
swaps.
The Term Loan commitments were provided by a syndication of 14
financial institutions to the Company. BofA Securities, Inc. is
Joint Lead Arranger and Sole Book Runner. Bank of America, N.A. is
the Administrative Agent. Citizens Bank, National Association,
Crédit Agricole Corporate and Investment Bank, JPMorgan Chase Bank,
N.A. and Wells Fargo Bank, N.A., are Joint Lead Arrangers and
Co-Syndication Agents. The Bank of Nova Scotia, The Huntington
National Bank, M&T Bank, MUFG Bank LTD., Regions Bank, Royal
Bank of Canada and Truist Bank are Co-Documentation Agents.
Bob Stephenson, Omega’s Chief Financial Officer, stated, “The
new Term Loan will fully replenish the $350 million of cash we used
to repay our August 1st bond maturity. This transaction further
enhances our strong balance sheet, providing additional liquidity,
interest rate certainty, and financial flexibility.” Mr. Stephenson
continued, “In addition to the balance sheet cash provided by the
Term Loan, we have our entire $1.45 billion revolving credit
facility and over $700 million remaining under our ATM equity shelf
program available to fund future investments and repay debt
maturities, including our $400 million in debt due in April
2024.”
Mr. Stephenson concluded, “We appreciate our banking
relationships and their strong support throughout the execution of
this Term Loan. We have enjoyed strong relationships with most of
these financial institutions for many years and look forward to our
continued partnerships as we strive to deliver further value to our
shareholders.”
Omega is a real estate investment trust that invests in the
long-term healthcare industry, primarily in skilled nursing and
assisted living facilities. Its portfolio of assets is operated by
a diverse group of healthcare companies, predominantly in a
triple-net lease structure. The assets span all regions within the
US, as well as in the UK.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the federal securities laws. 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, facility
transitions, growth opportunities, expected lease income, continued
qualification as a real estate investment trust (“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’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)
the impact of novel coronavirus (“COVID-19”) on our business and
the business of our operators, including without limitation, the
termination of the federally declared public health emergency and
related government and regulatory support on May 11, 2023, the
levels of staffing shortages, increased costs and decreased
occupancy experienced by operators of skilled nursing facilities
(“SNFs”) and assisted living facilities (“ALFs”) arising from the
pandemic, the ability of operators to comply with new infection
control and vaccine protocols, and the extent to which continued
government support may be available to operators to offset such
costs and the conditions related thereto; (iii) 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 Omega to collect unpaid rent or interest during the
pendency of a bankruptcy proceeding and retain security deposits
for the debtor’s obligations, and other costs and uncertainties
associated with operator bankruptcies; (iv) Omega’s ability to
re-lease, otherwise transition or sell underperforming assets or
assets held for sale on a timely basis and on terms that allow
Omega to realize the carrying value of these assets; (v) the
availability and cost of capital to us; (vi) changes in Omega’s
credit ratings and the ratings of its debt securities; (vii)
competition in the financing of healthcare facilities; (viii)
competition in the long-term healthcare industry and shifts in the
perception of various types of long-term care facilities, including
SNFs and ALFs; (ix) additional regulatory and other changes in the
healthcare sector; (x) changes in the financial position of our
operators; (xi) the effect of economic and market conditions
generally, and particularly in the healthcare industry; (xii)
changes in interest rates; (xiii) the timing, amount and yield of
any additional investments; (xiv) changes in tax laws and
regulations affecting REITs; (xv) the potential impact of changes
in the SNF and ALF market 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; (xvi) Omega’s ability to
maintain its status as a REIT; (xvii) the effect of other factors
affecting our business or the businesses of our operators that are
beyond our or their control, including natural disasters, other
health crises or pandemics and governmental action, particularly in
the healthcare industry, and (xviii) 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.
We caution you that the foregoing list of important factors may
not contain all the material factors that are important to you.
Accordingly, readers should not place undue reliance on those
statements. All forward-looking statements are based upon
information available to us on the date of this release. We
undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except as otherwise required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20230811362086/en/
Matthew Gourmand, SVP, Corporate Strategy & Investor
Relations or Bob Stephenson, CFO at (410) 427-1700
Omega Healthcare Investors (NYSE:OHI)
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