Health Care REIT to price $625 million convertible perpetual preferreds at 6.5%-7%, up 15%-20%

By Rebecca Melvin

New York, Feb. 28 - Health Care REIT Inc. plans to price $625 million of convertible perpetual preferred shares at $50 per share after the market close Tuesday that were talked to yield 6.5% to 7% with an initial conversion premium of 15% to 20%, according to a market source.

Health Care REIT also plans to price $1.3 billion of common stock.

The convertibles, which have a greenshoe of $93.75 million, or 15%, are being sold via joint bookrunners UBS Investment Bank, Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities.

The perpetual shares are non-callable for seven years and then provisionally callable if shares exceed 130% of the conversion price. There are no puts.

Proceeds from both registered, off-the-shelf offerings are earmarked to finance a portion of the purchase price of its previously announced acquisition of Genesis HealthCare Corp. for $2.4 billion.

If that acquisition is not completed, the proceeds will be used for general corporate purposes, including investing in health care and senior housing properties and repaying borrowings under the company's unsecured line of credit and other outstanding debt.

The convertible preferreds have takeover protection.

Toledo, Ohio-based Health Care REIT is a self-administered equity real estate investment trust.

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