Healthcare Realty Trust Inc.
) has inked an amendment for its $700 million unsecured revolving
credit facility. The move will help the company lower its
cost of capital as well as extend the maturities.
HEALTHCARE RLTY (HR): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
TERRENO REALTY (TRNO): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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In particular, Healthcare Realty's amendment to the revolving
credit facility will lower the pricing of the facility to 1.40%
over LIBOR, with a 0.30% facility fee, from 1.50% over LIBOR,
with a 0.35% facility fee.
Moreover, the maturity date of the facility gets extended to Apr
14, 2017, from Oct 14, 2015. This may be further extended, as per
the company's choice until Apr 14, 2018 but for a fee equal to
0.15% of the total commitments.
The facility involves a consortium of 15 banks with Wells Fargo
Securities, LLC - a unit of
Wells Fargo & Company
) and J.P. Morgan Securities LLC, of
JPMorgan Chase & Co.
), as Joint Lead Arrangers and Joint Bookrunners.
The move is a strategic fit and provides Healthcare Realty
adequate financial flexibility. Moreover, this real estate
investment trust has a well-diversified tenant base, with the
bulk of its tenants in various outpatient specialties that have
distinct demand and revenue sources.
As a result, the company has a steady revenue stream, minimizing
Medicare and Medicaid reimbursement risks, unlike that of the
senior housing facilities, where tenants historically have a
larger private pay component.
Healthcare Realty is scheduled to release its fourth-quarter 2012
results on Feb 20, 2013. The Zacks Consensus Estimate for the
fourth-quarter FFO (fund from operations) is currently pegged at
31 cents per share.
The company currently holds a Zacks Rank #3 (Hold). However,
another REIT stock that is performing better and is worth a look
Terreno Realty Corp.
), carrying a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.