Real estate investment trust (REIT) -
Newcastle Investment Corp.
) - disclosed the pricing of common stock to fund a part of its
recently announced $1 billion senior housing assets buyout.
In particular, the company priced a public offering of around
50.4 million shares of its common stock for gross proceeds of
roughly $264.9 million. Also, the company granted a 30-days
option to underwriters for buying additional common shares of up
to 7.5 million.
As a matter of fact, on Nov 18, 2013, Newcastle Investment
announced the penning of a deal to purchase a 52-property senior
housing properties portfolio from certain subsidiaries of Holiday
Acquisition Holdings LLC. In particular, the $1.01 billion worth
portfolio involves 52 independent living properties (5,885 units)
situated across 24 states.
Proceeds generated from the offering may also be used by
Newcastle Investment for meeting other corporate purposes,
including acquisitions of senior housing assets, collateralized
debt obligations, other real estate securities and mortgages,
operating businesses or other assets.
We believe that though this public offering will result in
share dilution for Newcastle Investment, the financing of the
acquisition deal is encouraging. Also, the purchase of the
portfolio, which is 100% private pay and 91% occupied on an
average (as of September 30, 2013), boost the company's senior
housing asset base and bodes well for its top line growth.
Notably, Credit Suisse Securities (USA) LLC of
Credit Suisse Group AG
) and UBS Securities LLC of
) assisted Newcastle Investment in the common share offering as
the joint book-running managers.
Newcastle Investment focuses on managing real estate related
assets and especially invests in senior housing assets, real
estate & other debts as well as other opportunistic
Currently, Newcastle Investment carries a Zacks Rank #4
(Sell). However, a mortgage REIT that is performing better is
Apollo Commercial Real Estate Finance, Inc.
) carrying a Zacks Rank #2 (Buy).
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