Brentwood TN-based Brookdale Senior Living announced Monday that the company has substantially reduced all 2023 debt maturities with $220 million in refinancing.
“I am very pleased Brookdale has now refinanced all 2023 maturities, with the exception of one highly-covered loan secured by an asset planned for sale,” Steven Swain, Brookdale’s executive vice president and chief financial officer, said in a statement. “This refinancing has cleared the maturity runway for nearly two years, considering that our next agency debt maturity is September 2024.”
The refinancing announcement comes amid rumors that the company is shopping for a buyer, but as of now, the rumors are just that. A Brookdale representative previously told McKnight’s that company executives do not comment on “market rumors or speculation.”
Last year, Brookdale sold 80% of its home health, hospice and therapy business to HCA Healthcare in a move meant to strengthen the company’s liquidity position and enable it to remain “judicious” with investments.
Monday, Brookdale said it obtained the $220 million of mortgage debt from Capital One, National Association as the administrative agent, joint lead arranger and lender, and Synovus Bank as the joint lead arranger and lender. CBRE Capital Markets was the financial adviser to Brookdale in securing the loan.
The debt has an initial three-year term and two one-year renewal options, exercisable subject to certain performance criteria. The debt carries a variable interest rate of 2.45% over the secured overnight financing rate and is interest-only for the first three years. The debt is secured by first priority mortgages on 24 senior living communities, and 25% of the loan amount is subject to a parent guaranty.
Brookdale saw a 7% increase in move-ins in the third quarter of this year compared with the same quarter in 2021, the company reported earlier this month. President and CEO Lucinda “Cindy” Baier said during August’s second quarter earnings call that the firm was focused largely on rebuilding occupancy. The first related goal would be its pre-pandemic 74.6% benchmark, she noted. The longer-range target would be 89%, which happens to be the company’s high water mark.
