Senior Housing Finance Activity: LTC Properties, Cambridge, Sabra, Beech Street

LTC Properties Privately Places $85.8 Million of Debt Financing

LTC Properties, Inc. (NYSE:LTC) announced on Monday it had entered into a private placement of 12-year senior unsecured notes amounting to $85.8 million to a group of institutional investors.

The notes have a 5.03% interest rate and mature on July 19, 2024, with scheduled annual principal pay-downs of approximately $17.2 million in years eight through twelve. 

LTC Properties has used a portion of the proceeds to pay down its unsecured revolving line of credit, and expects to use the remaining proceeds for general corporate purposes, including acquisitions. 

Cambridge Closes $5.1 Million Loan for Ill. Senior Care Property

Cambridge Realty Capital Companies recently closed on a $5.1 million FHA-insured HUD Lean loan to refinance Shelbyville Manor, a 135-bed skilled nursing and assisted living property in Shelbyville, Ill. 

The fully-amortized, 28-year term loan was underwritten by Cambridge Realty Capital Ltd. of Illinois, the company’s business arm that specializes in HUD funding programs, using HUD’s Section 232/223(a)(7) program.

Cambridge Provides $6.2 Million Loan for Ill. Senior Care Facility

Cambridge recently closed a $6.2 million HUD Lean first mortgage loan for Pekin Manor, a 132-unit skilled nursing and assisted living facility in Pekin, Ill. The fully-amortized, 30-year term loan was arranged using HUD’s Section 232/223(a)(7) program and was underwritten by Cambridge Realty Capital Ltd. of Illinois. 

Cambridge notes that it’s having a record year after closing 31 FHA-insured HUD loans totaling more than $230 million in the first half of 2012. The most popular funding program has been HUD’s Section 232/223 program for refinancing existing HUD loans, as about 78% of all loans closed by Cambridge during the period were in that category. 

Sabra Prices $100 Million of Senior Notes

Sabra Health Care REIT, Inc. (NASDAQ:SBRA) announced on Monday that certain of its subsidiaries have agreed to sell $100 million aggregate principal amount of 8.125% senior notes due 2018 at a price of 106.00& plus accrued interest from May 1, 2012, in a private placement to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, and outside the United States in reliance on Regulation S under the Securities Act).

The sale of the notes is expected to close on July 26, 2012. The notes will be fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and certain of its other existing and, subject to certain exceptions, future material subsidiaries. 

Sabra intends to use the net proceeds from the offering to repay the $42.5 million outstanding on its amended secured revolving credit facility, and the remaining proceeds to fund possible future acquisitions or for general corporate purposes. 

Beech Street Closes $7.7 Million in Loans to Refinance Two Ill. Senior Care Facilities

Bethesda, Md.-headquartered Beech Street Capital, LLC recently provided $7.7 million in HUD Section 232/223(a)(7) loans to refinance two skilled nursing facilities in Chicago, Ill. 

Joshua Rosen, executive vice president of Beech Street, originated the transaction. The loans’ financing structure allows the borrower to take advantage of substantial debt-service reduction. The lender provided a 24-year term with a very low interest rate, allowing the borrower to keep the same term and amortization period as the existing loan. 

The two facilities are Waterford Nursing & Rehabilitation Center, with 141 beds, and Heritage Nursing Home, with 127 beds. Both facilities cater primarily to Medicaid residents.