Back to top

Analyst Blog

In order to pay-off its debts, HCP, Inc. (HCP - Analyst Report) is raising capital through $350 million worth notes issuance. The company expects to reap net proceeds (after expenses) of about $344.9 million from this senior unsecured notes offering, which will be used for repaying $240 million outstanding under the company’s credit line. The remaining proceeds will be utilized for other corporate needs.

In particular, HCP priced 4.20% senior unsecured notes worth $350 million at 99.537% of the principal amount. The notes, due 2024, have a yield-to-maturity of 4.257%. Notably, owing to investors’ demand, the size of this senior unsecured notes offering was increased. The offering is slated to complete on Feb21, 2014, upon fulfillment of customary closing conditions.

Notably, reputed financial institutions are assisting HCP as joint book-running managers in this offering. These are J.P. Morgan Securities LLC of JPMorgan Chase & Co. (JPM - Analyst Report), Goldman, Sachs & Co. of The Goldman Sachs Group, Inc. (GS - Analyst Report) and Wells Fargo Securities, LLC of Wells Fargo & Company (WFC - Analyst Report).

For HCP, the aforementioned notes offering is a strategic fit as it will lower debt and consequently the interest expenses. Also, the increased financial flexibility will enable HCP to pursue its portfolio enhancement activity that will strengthen its top line.

Recently, HCP reported fourth-quarter 2013 adjusted FFO (funds from operations) per share of 76 cents, 2 cents ahead of the Zacks Consensus Estimate and 4 cents above the prior-year quarter figure. The results were aided by growth in revenues.

Also, for full-year 2013, HCP’s adjusted FFO per share came in at $3.01, substantially higher than the prior-year FFO per share of $2.78. At the end of the year, HCP had cash and cash equivalents of $300.6 million, up from $247.7 million at the prior-year end.

HCP currently carries a Zacks Rank #3 (Hold).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
CLAYTON WIL… CWEI 117.30 +1.78%