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Generates Approximately $1.1 Billion of Total Cash Proceeds to MPT
Brings Total Liquidity Transactions Year-to-Date to $1.6 Billion, or 80% of MPT's Initial FY 2024 Target
Medical Properties Trust, Inc. (the "Company" or "MPT") (NYSE:MPW) today announced that it has sold its interests in five Utah hospitals to a newly formed joint venture (the "Venture") with an investment fund (the "Fund") affiliated with a leading multi-strategy, multi-billion dollar institutional asset manager with a proven track record in real estate investments. MPT has retained an approximate 25% interest in the Venture and the Fund purchased an approximate 75% interest for $886 million, fully validating MPT's underwritten lease base of approximately $1.2 billion. Simultaneous with the closing of this sale transaction, the Venture placed new non-recourse secured financing, providing $190 million of additional cash to MPT based on its share of the proceeds and further confirming underwritten asset values.
Together, the two transactions delivered approximately $1.1 billion of immediate cash proceeds to MPT, before costs and reserves. The proceeds are expected to be used to reduce outstanding debt – including payment in full of the approximate $300 million Australian term loan due 2024 and repayment of borrowings under its revolving credit facility – and for general corporate purposes.
Edward K. Aldag, Jr., Chairman, President and Chief Executive Officer said, "MPT's approach to underwriting hospital real estate has once again been validated by highly sophisticated third-party participants in a broadening private market for real hospital assets. Our primary focus remains on accelerating our capital allocation strategy, and we are now confident that we will exceed our initial target of $2.0 billion in liquidity transactions in 2024 based on the valuations achieved on recent transactions and the terms we are actively negotiating for additional transactions."
As previously reported, the Utah lessee (an affiliate of CommonSpirit Health) may acquire the leased real estate at a price equal to the greater of fair market value and the approximate $1.2 billion lease base at the fifth or tenth anniversary of the 2023 master lease commencement. MPT granted certain limited and conditional preferences to the Fund based on the possible exercise price of the lessee's purchase option.
Eastdil Secured, L.L.C. acted as exclusive financial adviser, and Goodwin Procter LLP and Baker Donelson PC acted as legal advisers for MPT.
Posted In: MPW
