HCP Inc. (HCP), the largest medical real estate investment trust (REIT), recently announced plans to offer 12 million common shares to raise cash and repay debt. The company will also grant the underwriters an option to purchase an additional 1.8 million shares to cover any over-allotments. Bank of America Merrill Lynch is acting as book-running manager for the public offering.
HCP intends to utilize the net proceeds from the offer to repay debt under its revolving credit facility and pay off a mortgage debt of $71 million. HCP follows a conservative approach to financial management by actively managing its debt-to-equity levels and maintaining multiple sources of liquidity such as the revolving credit facility, access to capital markets and secured debt providers, and divesture of assets. The financial flexibility enables the company to take advantage of potential investment opportunities that in turn bolsters top-line growth.
HCP is the leading medical REIT in the U.S. with one of the largest and most diversified portfolios in the healthcare sector and exposure to all types of facilities. The product diversity of the company allows it to capitalize on opportunities in different markets based on individual market dynamics, and provides a hard-to-replicate competitive advantage over its peers.
By the end of first quarter 2010, HCP’s investment portfolio comprised of interests in 677 properties including 257 senior housing, 251 medical office, 100 life science, 48 skilled nursing and 21 hospital facilities; and $1.9 billion of mezzanine and other secured loans.
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