Back to top

Analyst Blog

Healthcare Realty Trust Inc. (HR - Snapshot Report) has inked an amendment for its $700 million unsecured revolving credit facility.  The move will help the company lower its cost of capital as well as extend the maturities.

In particular, Healthcare Realty’s amendment to the revolving credit facility will lower the pricing of the facility to 1.40% over LIBOR, with a 0.30% facility fee, from 1.50% over LIBOR, with a 0.35% facility fee.    

Moreover, the maturity date of the facility gets extended to Apr 14, 2017, from Oct 14, 2015. This may be further extended, as per the company’s choice until Apr 14, 2018 but for a fee equal to 0.15% of the total commitments.  

The facility involves a consortium of 15 banks with Wells Fargo Securities, LLC – a unit of  Wells Fargo & Company (WFC - Analyst Report) and J.P. Morgan Securities LLC, of JPMorgan Chase & Co. (JPM - Analyst Report), as Joint Lead Arrangers and Joint Bookrunners.

The move is a strategic fit and provides Healthcare Realty adequate financial flexibility. Moreover, this real estate investment trust has a well-diversified tenant base, with the bulk of its tenants in various outpatient specialties that have distinct demand and revenue sources.

As a result, the company has a steady revenue stream, minimizing Medicare and Medicaid reimbursement risks, unlike that of the senior housing facilities, where tenants historically have a larger private pay component.

Healthcare Realty is scheduled to release its fourth-quarter 2012 results on Feb 20, 2013. The Zacks Consensus Estimate for the fourth-quarter FFO (fund from operations) is currently pegged at 31 cents per share.

The company currently holds a Zacks Rank #3 (Hold). However, another REIT stock that is performing better and is worth a look is Terreno Realty Corp. (TRNO - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

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 Zacks.com. 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
QIHOO 360 T… QIHU 95.04 +4.95%
PILGRIM'S P… PPC 31.52 +3.72%
CLAYTON WIL… CWEI 138.97 +3.55%
CALLON PETE… CPE 11.50 +3.14%
ACTELION LT… ALIOF 124.80 +2.97%