Deerfield Management Company L.P. Managed Funds to Recapitalize
Adeptus and MPT Master Leases to be Assumed
Louisiana Facilities Re-Leased Directly to Ochsner Clinic
Foundation
BIRMINGHAM, Ala.--(BUSINESS WIRE)--Apr. 4, 2017--
Medical Properties Trust, Inc. (NYSE: MPW) announced today that its
operating partnership, MPT Operating Partnership, L.P. (“MPT” or the
“Company”) on behalf of itself and certain of its affiliates has agreed
in principle with Deerfield Management Company, L.P. on behalf of itself
and certain affiliates (collectively, “Deerfield”) to the restructuring
in bankruptcy of Adeptus Health, Inc., including the assumption of MPT’s
master leases of facilities in Texas, Colorado, Arizona and Ohio.
Deerfield, a premier healthcare-only investment firm with over $8.0
billion under management, has purchased Adeptus’ outstanding bank debt
and expects to provide additional financing, along with operational and
managerial support, to Adeptus pursuant to an anticipated Chapter 11
bankruptcy process. The agreement between MPT and Deerfield provides for
the pre-bankruptcy payment of 100% of April rent, assumption of
approximately 80% of the master leased facilities at current rental
rates, re-leasing of approximately 5% of the facilities to the former
Louisiana venture partner and the sale or re-leasing of certain Texas
facilities to new operators. MPT will provide a one-time rental credit
of approximately $3.1 million during the 12 months commencing upon
bankruptcy exit.
“We are very pleased, but not surprised, at the number of sophisticated
and well capitalized investors and operators that have been attracted to
our market-dominant portfolio of free-standing emergency facilities,”
said Edward K. Aldag, Jr., MPT’s Chairman, President and Chief
Executive. “These investors, and particularly the Deerfield team,
recognize the improvements to patient care and outcomes and the lower
overall costs that free standing emergency facilities provide to
market-dominant hospital systems. Our unique master lease structure,
specialized underwriting knowledge and industry foresight equipped MPT
to achieve the outstanding results that we expect from this agreement:
we will fully receive our April rent; during the restructuring we will
continue to be fully paid our contractual rent for all facilities; and
upon completion of the restructuring there will be no further rental or
other concessions on the leases assumed.”
The Company simultaneously announced that, in cooperation with Adeptus,
MPT’s Louisiana free standing emergency facilities (with a total
budgeted investment of up to approximately $24.0 million) have been
re-leased to Ochsner Clinic Foundation, the preeminent health care
system in the New Orleans area. The Ochsner leases provide for 15-year
initial terms with a 9.2% average minimum lease rate based on MPT’s
total development and construction cost; Ochsner has certain purchase
options during the lease term based generally on the greater of MPT’s
total development cost and fair value.
MPT expects to re-lease or sell certain Texas facilities (“Transitional
Facilities”) representing approximately 15% of the total existing
Adeptus master lease value. These transitions are expected to be
completed by the fourth quarter of 2018 and Adeptus will continue to pay
contractual rent until the earlier of (a) transition to a new operator
is complete or (b) an agreed future date. The agreed future date for
approximately 60 percent of the Transitional Facilities is one year
following bankruptcy exit and the remainder Transitional Facilities have
agreed future dates of 90 days post-bankruptcy exit.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a self-advised real estate investment
trust formed to capitalize on the changing trends in healthcare delivery
by acquiring and developing net-leased healthcare facilities. MPT’s
financing model allows hospitals and other healthcare facilities to
unlock the value of their underlying real estate in order to fund
facility improvements, technology upgrades, staff additions and new
construction. Facilities include acute care hospitals, inpatient
rehabilitation hospitals, long-term acute care hospitals, and other
medical and surgical facilities. For more information, please visit the
Company’s website at www.medicalpropertiestrust.com.
The statements in this press release that are forward looking are
based on current expectations and actual results or future events may
differ materially. Words such as "expects," "believes," "anticipates,"
"intends," "will," "should” and variations of such words and similar
expressions are intended to identify such forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results of the
Company or future events to differ materially from those expressed in or
underlying such forward-looking statements, including without
limitation: the execution of definitive documentation; approval of the
restructuring by court authorities; the amount of rent concession to
Adeptus Health, Inc.; the time it takes to sell or re-lease the Texas
facilities; the amount of losses, if any, from our investments in or
rental income from the Adeptus Health facilities, and other factors
affecting the real estate industry generally or healthcare real estate
in particular. For further discussion of the factors that could affect
outcomes, please refer to the "Risk factors" section of the Company's
Annual Report on Form 10-K for the year ended December 31, 2016, and as
updated by the Company’s subsequently filed Quarterly Reports on Form
10-Q and other SEC filings. Except as otherwise required by the federal
securities laws, the Company undertakes no obligation to update the
information in this press release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170404005882/en/
Source: Medical Properties Trust, Inc.
Medical Properties Trust, Inc.
Tim Berryman, 205-397-8589
Director
– Investor Relations
tberryman@medicalpropertiestrust.com