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Monday, 03 August 2009

HCP Buys Senior Debt on Manor Care Portfolio

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HCP Inc. has paid $590 million for a $720 million mortgage participation in a $1.6 billion senior mortgage that was funded to facilitate Carlyle Group's $6.3 billion acquisition of Manor Care Inc. last year.

HCP, a Long Beach, Calif., REIT that invests in healthcare properties, lined up financing for 72 percent of the debt's purchase price, so it only had to put up $165 million of equity for the investment. The debt it bought pays a rate pegged to Libor plus 125 basis points and matures in January 2012, but could be extended for another year. HCP said its effective un-leveraged internal rate of return would be about 13 percent.

The senior-most debt has a debt-service coverage ratio of 10x based on cash flows over the past 12 months. It is backed by 331 healthcare facilities located in 30 states.

The loan participation is part of the senior-most piece of the $3.6 billion of debt that Colony raised from JPMorgan, Credit Suisse and Bank of America.

Previously, HCP, the former Health Care Property Investors, acquired a $1 billion mezzanine loan for $900 million, so it now owns $1.72 billion of the total debt on the company, HCR ManorCare.

"We are excited about our opportunity to accretively invest in this senior debt tranche and enhance the tactical options of our strategic investment in HCR ManorCare," said Jay Flaherty, chairman and chief executive of HCP.

Comments? E-mail Orest Mandzy or call him at (267) 247-0112, Ext. 211.


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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Assisted Living/Health Care
  • Subject: Loan Offerings (LOAN), Mortgages/Financing (MOR)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
  • Company: Healthcare Realty Trust
Read 799 times Last modified on Wednesday, 05 August 2009

Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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