LTC Announces $141 Million SkilledNursing Portfolio Transaction
WESTLAKE VILLAGE, Calif. -- August 7, 2013
LTC Properties, Inc. (NYSE:LTC) announced today that it entered into a
$141.0million mortgage loan agreement with affiliates of Prestige Healthcare
to be secured by 15 properties with a total of 2,092 licensed skilled nursing
beds and 24 independent living units in Michigan. Prestige Healthcare is a
privately held operating company based in Louisville, KY that currently
operates skilled nursing facilities with approximately 2,500 beds in 7 states
including Michigan. The loan is for a term of 30 years and will bear interest
at an initial rate of 9.41% for five years, escalating annually thereafter by
2.25%. Payments will be interest-only for a period of three years, after which
the borrower will make interest payments along with annual principal payments
Of the aggregate loan amount, LTC anticipates funding approximately $126.0
million during the fourth quarter of 2013 with additional forward commitments
of $12.0million for capital improvements and up to $3.0 million for
short-term working capital. The loan agreement also provides, under certain
conditions and based on certain operating metrics and valuation thresholds
achieved and sustained within the first twelve years of the term, for
additional loan proceeds of up to $40.0million with such proceeds limited to
$10.0 million per year.
The borrower will have a one-time option between the third and twelfth years
to prepay up to 50% of the then outstanding loan balance without penalty.
Exclusively for the purposes of this option, the properties collateralizing
the loan have been separated by LTC into two pools of assets. If and when the
option is exercised, LTC will identify which of the two pools it will release
for prepayment and removal from the portfolio of properties securing the loan.
If the prepayment option is exercised and timely concluded, the borrower
forfeits its opportunity to access any additional loan proceeds.
Additionally, under certain circumstances, including a change in the
regulatory environment, LTC has an option to purchase the properties.
Wendy Simpson, the Company’s CEO and President, commented, “LTC is very
pleased to announce this transaction expanding our existing relationship with
Prestige Healthcare, further diversifying our operator base, enhancing our
geographic diversification and increasing our presence in the top 31
Metropolitan Statistical Areas. Furthermore, this off-market transaction
demonstrates the success of our relationship oriented marketing strategy and
our strategy to invest in newer or newly renovated skilled nursing assets or
properties with expansion and/or renovation potential. Although structured as
a long term mortgage loan to meet the needs of our customer, this transaction
embodies most elements of a long term master lease.”
The Company has posted additional information for this transaction on its
website at www.LTCProperties.com in the “Presentation” section of the
“Investor Information” tab under the title “August 7, 2013 Press Release
Michigan Transaction Supplemental.”
The Company is a self-administered real estate investment trust that primarily
invests in senior housing and long-term care properties through triple-net
lease transactions, mortgage loans and other investments. For more information
on LTC Properties, Inc., visit the Company’s website at www.LTCProperties.com.
Forward Looking Statements
This press release includes statements that are not purely historical and are
“forward looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the Company’s
expectations, beliefs, intentions or strategies regarding the future. All
statements other than historical facts contained in this press release are
forward looking statements. These forward looking statements involve a number
of risks and uncertainties. Please see our most recent Annual Report on Form
10-K, our subsequent Quarterly Reports on Form 10-Q, and in our other publicly
available filings with the Securities and Exchange Commission for a discussion
of these and other risks and uncertainties. All forward looking statements
included in this press release are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update
such forward looking statements. Although the Company’s management believes
that the assumptions and expectations reflected in such forward looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct. The actual results achieved by the Company
may differ materially from any forward looking statements due to the risks and
uncertainties of such statements.
LTC Properties, Inc.
Wendy L. Simpson
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