MedEquities closes $425 million credit facility in two tranches

By Wendy Van Sickle

Columbus, Ohio, Feb. 13 – MedEquities Realty Trust, Inc. closed an amended and restated $425 million secured credit facility, consisting of a $300 million revolving credit facility and a $125 million term loan, according to a press release.

The amended credit facility replaced a $300 million revolver, which was scheduled to mature in November 2017.

Borrowings under both tranches of the amended credit facility bear interest at Libor plus a margin of 175 basis points to 300 bps, depending on MedEquities’ leverage.

The company entered into interest rate swap agreements on the full notional amount of the term loan. The forecasted all-in interest rate under the term loan is currently 359 bps, which comprises the fixed 184 bps-swap rate plus the margin.

KeyBanc Capital Markets, JPMorgan Chase Bank and Citigroup Global Markets acted as co-lead arrangers and bookrunners. JPMorgan Chase Bank and Citibank served as co-syndication agents. Capital One served as documentation agent. KeyBank NA served as administrative agent.

The revolver matures in February 2021, with one 12-month extension option. The term loan matures in February 2022.

An accordion feature allows the total borrowing capacity to be increased to up to $700 million, including the ability to add and fund a second term loan.

Both the accordion and the extension option are subject to certain conditions.

The new facility includes the ability to convert to an unsecured basis once minimum asset and borrowing base targets are achieved as well as certain other conditions.

“The new revolving credit facility and term loan provide substantial flexibility to our capital structure with significantly longer maturities, lower revolver borrowing costs, reduced exposure to fluctuations in short term interest rates and additional capacity to execute our acquisition plans,” Jeff Walraven, executive vice president and chief financial officer of MedEquities, said in the release.

At closing, the company drew down $31.5 million on the revolver and $125 million on the term loan to fully repay all outstanding amounts under its prior facility.

The Nashville-based real estate investment trust invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments.

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