In order to pay-off its debts,
) is raising capital through $350 million worth notes issuance.
The company expects to reap net proceeds (after expenses) of
about $344.9 million from this senior unsecured notes offering,
which will be used for repaying $240 million outstanding under
the company's credit line. The remaining proceeds will be
utilized for other corporate needs.
In particular, HCP priced 4.20% senior unsecured notes worth
$350 million at 99.537% of the principal amount. The notes, due
2024, have a yield-to-maturity of 4.257%. Notably, owing to
investors' demand, the size of this senior unsecured notes
offering was increased. The offering is slated to complete on
Feb21, 2014, upon fulfillment of customary closing
Notably, reputed financial institutions are assisting HCP as
joint book-running managers in this offering. These are J.P.
Morgan Securities LLC of
JPMorgan Chase & Co.
), Goldman, Sachs & Co. of
The Goldman Sachs Group, Inc.
) and Wells Fargo Securities, LLC of
Wells Fargo & Company
For HCP, the aforementioned notes offering is a strategic fit
as it will lower debt and consequently the interest expenses.
Also, the increased financial flexibility will enable HCP to
pursue its portfolio enhancement activity that will strengthen
its top line.
Recently, HCP reported fourth-quarter 2013 adjusted FFO (funds
from operations) per share of 76 cents, 2 cents ahead of the
Zacks Consensus Estimate and 4 cents above the prior-year quarter
figure. The results were aided by growth in revenues.
Also, for full-year 2013, HCP's adjusted FFO per share came in
at $3.01, substantially higher than the prior-year FFO per share
of $2.78. At the end of the year, HCP had cash and cash
equivalents of $300.6 million, up from $247.7 million at the
HCP currently carries a Zacks Rank #3 (Hold).
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization
and other non-cash expenses to net income.
GOLDMAN SACHS (GS): Free Stock Analysis
HCP INC (HCP): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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