Health Care REIT Inc.
), a leading health care real estate investment trust (REIT) that
operates senior housing and health care real estate, has recently
completed its secondary offering of 13.8 million common shares at
$58.75 each, including 1.8 million shares sold to underwriters to
cover the over-allotment options.
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Health Care REIT raised approximately $1.1 billion of gross
proceeds from the offer. The company intends to utilize the
proceeds to repay debt under its unsecured line of credit and other
BofA Merrill Lynch, the investment banking and wealth management
Bank of America Corporation
) - a global financial services firm; Barclays Capital Inc., the
investment banking division of
); J.P. Morgan Securities LLC, the investment banking division of
JPMorgan Chase & Co.
); UBS Investment Bank, the investment banking division of
); and Wells Fargo Securities, part of
Wells Fargo & Company
) acted as joint book-running managers for the offering.
Health Care REIT invests across the full spectrum of senior housing
and healthcare real estate properties. Headquartered in Toledo,
Ohio, the company also provides an extensive array of property
management and development services.
Founded in 1970, the company was the first REIT to invest
exclusively in healthcare facilities. Health Care REIT provides
senior housing operators and healthcare systems with a single
source for facility planning, design and turn-key development,
property management, and monetization or expansion of existing real
However, deep cuts in Medicare have been proposed over the next
five years by reducing or freezing payments to skilled nursing
facilities, hospitals, and other healthcare providers. With a large
portion of revenues being determined by government payout rates,
forces beyond the company's control could negatively affect
revenues and operator coverage ratios. Consequently, we maintain
our 'Neutral' recommendation on Health Care REIT, which currently
has a Zacks #3 Rank that indicates a short-term 'Hold' rating.