October 20, 2011
By Suzann D. Silverman, Editor-in-Chief
Seniors housing and healthcare powerhouse Ventas Inc. expanded its borrowing capacity with the closing of a new credit facility. Subsidiary Ventas Realty L.P. confirmed a $2 billion unsecured, four-year revolving credit facility, replacing a $1 billion facility scheduled to mature in April 2012. The new facility was priced at 125 basis points over LIBOR, an improvement over the 280-basis-point pricing of the earlier financing provision. The new facility matures in October 2015, with the option to extend the maturity date for another year under certain conditions, and includes a $500 million accordion feature that allows the company to expand its borrowing capacity.
Ventas chairman & CEO Debra Cafaro in a release attributed the company’s capacity to expand its borrowing capacity to its acquisition of Nationwide Healthcare Properties, a $7.6 billion deal that added more than 600 seniors housing, skilled nursing and medical office properties to the REIT when the deal closed in July. The deal was eight years in the making but resulted in “arguably the leading healthcare REIT by equity value,” noted Zacks Investment Research, which at the time of the deal lauded it for bringing “two of the most complementary customer franchises together in the healthcare real estate market” that “creates a diversified company with a better scope of operations.” The deal resulted in a company with more than 1,300 assets and an equity market capitalization of $17 billion.
Ventas has been actively acquiring companies in the past several years. Earlier this year, it purchased Atria Senior Living Group, the fourth-largest U.S. operator of assisted living facilities, for $3.1 billion. In July of last year, it acquired Lillibridge Healthcare Services for $7.6 billion. Also in recent years, it purchased Sunrise Senior Living REIT (2007), Senior Care (2006), Provident Senior Living Trust (2005) and ElderTrust (2004).
For more on Cafaro’s strategy for Ventas, click here to access “Winning Streak” in CPE’s October 2011 issue.