Health Care REIT, Inc. (HCN) recently announced that it has priced 4.125% of senior unsecured notes for approximately $600 million. These notes are expected to mature on April 1, 2019 and were priced at 99.694% of their face value to generate 4.176%. The offering is expected to close on April 3, 2012.
The company expects to use the net proceeds from the offering to repay approximately $126 million of its 4.75% convertible senior notes maturing in 2026 at a redemption price of 100% of principal amount, including accrued and unpaid interest to pay off up to $226 million of certain secured indebtedness. The remaining proceeds will be used for other general corporate purposes, including investments on health care and seniors housing properties.
Health Care reported fourth quarter 2011 FFO (funds from operations) of $154.4 million or 83 cents per share compared with $85.1 million or 61 cents in the year-earlier quarter. Fund from operations, 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.
During fiscal 2011, Health Care raised over $4 billion capital from debt and equity offering, including $700 million in fourth quarter 2011. At year-end 2011, the company had cash and cash equivalents of $163.5 million and total debt of $7.2 billion.
Health Care is a real estate investment trust (:REIT) that invests across the full spectrum of senior housing and health care real estate properties. Headquartered in Toledo, Ohio, Health Care REIT also provides an extensive array of property management and development services.
Health Care currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, HCP Inc. (HCP), currently has a Zacks #3 Rank.
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