Medical Properties Trust, Inc. Secures £631 Million in New Financing for U.K. Portfolio
Medical Properties Trust, Inc. (MPT) has recently secured approximately £631 million ($800 million) in new financing for its U.K. portfolio, demonstrating the enduring value of hospital real estate. The financing, backed by certain properties in its U.K. portfolio, was completed with a consortium of global institutional, insurance, and pension investors led by Song Capital, a European real estate investment firm.
Edward K. Aldag, Jr., Chairman, President, and Chief Executive Officer of MPT, highlighted the company’s success in raising $2.4 billion in liquidity in the first five months of the year, surpassing its initial full-year target of $2.0 billion. This achievement reflects the recognition of the value embedded in MPT’s portfolio of hospital real estate assets by sophisticated third-party investors.
The transaction includes 27 of the 36 facilities leased to Circle Health in the U.K. and is executed at a conservatively underwritten loan-to-value ratio in the low-40% range. This implies an approximate 20% increase in value since MPT acquired the majority of the underlying properties about four years ago, despite a period of cap rate expansion and rising interest rates. The loan carries a fixed cash pay rate of 6.9% over a 10-year term, excluding debt issuance costs.
The proceeds from the financing will be used to repay outstanding debt, including secured term loans maturing in 2024 and 2025, as well as for other general corporate purposes. Goodwin Procter (UK) LLP acted as the legal adviser for MPT, while Slaughter and May, CBRE, and Rothschild & Co advised Song Capital.
MPT is a self-advised real estate investment trust that acquires and develops net-leased hospital facilities. With 436 facilities and approximately 43,000 licensed beds in nine countries and across three continents, MPT is one of the world’s largest owners of hospital real estate. The company’s financing model facilitates acquisitions, recapitalizations, and allows hospital operators to unlock the value of their real estate assets for investments in operations and facility improvements.
The successful completion of this financing underscores MPT’s ability to access capital and highlights the enduring value of hospital real estate assets. For more information about Medical Properties Trust, Inc., visit their website at www.medicalpropertiestrust.com.