Omega Healthcare Investors Inc., a real-estate investment trust targeting the long-term care industry, got $700 million of bank loans to replace debt obtained last year.
The financing consists of a $500 million revolving credit line that will be used to fund acquisitions, and a $200 million unsecured term loan, Omega said yesterday in a statement distributed by Business Wire. The credit pact has a so-called according feature allowing the company to expand its borrowing by $300 million to a total of $1 billion.
Bank of America Corp., Credit Agricole SA and RBS Citizens NA were lead arrangers for the financing, the Hunt Valley, Maryland-based company said.
The four-year revolver pays interest at 1 percentage point to 1.9 percentage points more than the London interbank offered rate, depending on the company’s credit rating, according to the statement.
The interest rate on the five-year term loan is 1.1 percentage points to 2.3 percentage points more than Libor, which is a rate banks say they can borrow in dollars from each other.
Omega has speculative-grade credit ratings of Ba2 at Moody’s Investors Service and BB+ at Standard & Poor’s.
As of the end of September, Omega owned or held mortgages on specialty hospitals, including skilled nursing and assisted living facilities, in 33 states.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.