Senior Housing Finance Activity: Cambridge, HealthLease Properties, HCP

Mainstreet Property Group’s HealthLease Properties REIT Closes $25 Million Credit Line 

Mainstreet Property Group, LLC, announced on Tuesday that certain indirect subsidiaries of HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) have entered into a $25 million revolving credit facility with PNC Bank.

The facility has an initial term of 36 months from closing and provides for interest-only payments during the term with a borrowing rate of LIBOR plus 275 to 325 basis points, depending on the total amount drawn. The REIT has provided a guarantee in respect of its subsidiaries’ obligations under the credit facility.

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Mainstreet Property Group, based in Cicero, Ind. and led by chairman and CEO Zeke Turner, indirectly holds an interest in the REIT through the ownership of Class B limited partnership units of a subsidiary of the REIT.

“The additional net proceeds from the REIT’s initial public offering, coupled with the new credit line, further enhances our already strong financial position and puts the REIT in a fantastic spot to be competitive and opportunistic in the marketplace,” Chairman and CEO Zeke Turner said in a statement.

Life Care Community Closes Bond Refunding of Approximately $47 Million 

Life Care community Inverness Village recently closed on a bond refunding of approximately $47 million to both institutional and retail investors. Many of the bond maturities were over-subscribed, allowing re-pricing of the long bond’s interest rate yield to 5.69%—more than 1% below the original 5.75% rate.

The senior living community’s own residents together purchased 44% of the bonds.

“The fact that there was such strong and immediate interest in these bonds from Inverness Village residents and investors is a testament to the confidence people feel both in our current financial stability and future prospects in this region,” said Scott Bushong, the community’s executive director, in a statement.

The Series 2012 Bonds were issued for three reasons: to refund a portion of the Series 2007A Variable Rate Revenue Refunding Bonds; to fund a debt service reserve fund; and to cover issue costs for the Series 2012 Bonds.

“The strong fixed rate market allowed Inverness Village to refinance a larger portion of the Series 2007A Bonds than originally anticipated, with $42.9 million being refunded,” noted Zeigler Capital Markets, who co-managed the sale with Wells Nelson.

Institutional investors purchased bonds in the amount of approximately $26.4 million, while retail investors purchased approximately $21.7 million.

HCP Prices $300 Million of Senior Unsecured Notes

HCP, Inc. (NYSE:HCP) priced an offering of $300 million of 3.15% unsecured notes due 2022, with an increased offering size due to investor demand.

The price to investors was 98.888% of the principal amount of the notes for an effective yield of 3.28%. The net proceeds of the offering will be approximately $293.7 million, and will be used for general corporate purposes that may include the funding of future acquisitions or investments.

The offering is expected to close on July 23, 2012. Goldman, Sachs & Co., J.P. Morgan, and Wells Fargo Securities acted as joint book-running managers for the offering.

Cambridge Realty Closes $21.45 Million in Financing for Five Senior Care Properties

Cambridge Provides $2.8 Million Refinance to Calif. Skilled Nursing Facility

Cambridge Realty Capital Companies recently provided a $2.8 million HUD Lean loan to refinance Mission View Health Center, a 128-bed skilled nursing facility located in San Luis Obispo, Calif.

The fully-amortized, 26-year term loan was arranged for the property’s owner, a California limited liability company, using HUD’s Section 232/223(f) program.

Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that underwrites FHA-insured HUD loans, underwrote the transaction, which was coordinated by Hymie Barber, National Originations Manager and Managing Director of Catalyst/Cambridge Healthcare Finance in Los Angeles.

Cambridge Closes a $4.17 Million Refinance for Illinois Senior Care Facility

Cambridge Realty Capital Companies recently closed on a $4.17 million first-mortgage loan to refinance an Illinois senior care facility.

The fully-amortized, 34-year term loan was used to refinance Jerseyville Manor, a 106-bed skilled nursing facility in Jerseyville, Ill. Cambridge Realty Capital, Ltd. underwrote the loan, which was through HUD’s Section 232/223(a)(7) program.

Cambridge Closes a $5.6 Million Loan to Refinance Ill. Senior Care Facility

Cambridge Realty Capital recently closed a $5.6 million HUD Lean loan to refinance Pittsfield Manor, a 113-bed skilled nursing and assisted living facility in Pittsfield, Ill.

The fully amortized, 33-year term loan was arranged using HUD’s Section 232/223(a)(7) program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

Pittsfield Manor has 89 skilled care and 24 assisted living beds. The loan’s interest rate was not disclosed.

Cambridge Provides a $4.48 Million Refinance for Ill. Assisted Living Property

Cambridge recently closed on a $4.48 million HUD Lean loan to refinance Hawthorne Inn of Galesburg, a 52-bed assisted living property in Galesburg, Ill.

The fully-amortized, 33-year term loan was arranged through HUD’s Section 232/223(a)(7) program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

Cambridge Closes a $4.4 Million Refinance for an Ill. Senior Care Facility

Cambridge Realty Capital Companies recently closed a refinance of a $4.4 million HUD second mortgage loan for an Illinois senior care facility.

Aiden of Waterford is a 151-unit skilled nursing and assisted living property located in Aurora, Ill. The fully-amortized, 33-year term mortgage was arranged using HUD’s Section 232/223(a)(7) refinance program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

The property has 99 skilled care beds and 52 assisted living units in two separate buildings.

Senior Housing Properties Trust Prices $350 Million of Unsecured Senior Notes

Senior Housing Properties Trust (NYSE: SNH) has priced an underwritten public offering of $350 million of 5.625% unsecured senior notes, due August 1, 2042.

The settlement of this offering is expected to occur on July 20, 2012.

Senior Housing Properties Trust intends to use the net proceeds from this offering to prepay the variable portion of its Fannie Mae secured term loan, which carries a current annual interest rate of 6.38%, to repay outstanding amounts under its revolving credit facility and for general business purposes, which may include funding possible future acquisitions of properties.

The joint book-running managers for this offering were Citigroup, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC. The joint lead managers for this offering were Jefferies & Company, Inc., and RBC Capital Markets, LLC.

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