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Elli sees value slump in12 ¼% notes due 2020, expects to pay debts
By Susanna Moon
Chicago, June 24 – Elli Investments Ltd. saw the value dip on its 12¼% senior notes due 2020 but expects to stay current on its interest and other obligations under the notes, according to an 8-K filing by investor HCP Inc. with the Securities and Exchange Commission.
HCP said it found a non-temporary drop in the estimated fair value of its investment in the 12.25% notes.
The notes were issued by Elli Investments, a subsidiary of Terra Firma, as part of the financing for Elli’s acquisition of Four Seasons Health Care.
The dip in value was due to “significant deterioration” in Four Seasons’ operating performance since the fourth quarter of 2014, the filing said.
“Elli remains obligated to repay the aggregate par value of the notes at maturity, including interest payments due June 15 and Dec. 15 each year, is current on its contractual interest payments and is in compliance with its obligations under the notes,” the filing added.
HCP said it expects to record a non-cash impairment charge in the second quarter of 2015 of about $42 million, or $0.09 per diluted share, lowering the carrying value of its notes to about $174 million, or £111 million.
The company bought £138.5 million par amount of the notes at a discount for £136.8 million in June 2012, representing 79% of the total £175 million issued and outstanding notes.
As reported May 1, 2012, the leveraged buyout of England-based care home operator Four Seasons Health Care was to include £525 million of high-yield bonds.
The Wilmslow, England-based company was being acquired by England-based private equity firm Terra Firma Capital Partners Ltd. for £825 million.
HCP is a real estate investment trust for the health-care industry is based in Long Beach, Calif.
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