HCP takes in $846.25 million early tenders for 2022, 2023 notes

By Wendy Van Sickle

Columbus, Ohio, July 5 – HCP, Inc. announced the early results of its cash tender offer for up to $500 million of its $800 million outstanding 4.25% senior notes due 2023 and its $600 million outstanding 4% senior notes due 2022.

By the early deadline, midnight ET at the end of July 3, the issuer had received tenders for $471,416,000 of the 2023 notes and $374,829,000 of the 2022 notes, according to a press release Friday.

For each series, the issuer was targeting an acceptance amount of $250 million, and the 2023 notes have acceptance priority over the 2022 notes.

The company increased the tender cap to $500 million on June 20 after announcing earlier in the day the tender offer for an initial maximum of $400 million of the notes.

HCP had also increased the target allocation for each series from $200 million initially.

The company previously said if notes of any series were tendered in an amount in excess of the $250 million target allocation, it will accept for purchase any notes tendered in excess of the target allocation based on the acceptance priority levels.

The company said in Friday’s update that it does not expect to accept any additional tenders given that the offer was oversubscribed by the early deadline.

The offers will expire at midnight ET at the end of July 18.

Holders who tendered their notes by the early tender time are eligible to receive the applicable total consideration. The total consideration includes an early tender premium of $30 per $1,000 principal amount.

The total consideration for each series will be determined by reference to the applicable fixed spread plus the yield based on the bid-side price of the applicable U.S. Treasury reference security. The reference security is the 2% U.S. Treasury due May 31, 2024 for the 2023 notes and the 1.75% U.S. Treasury due June 15, 2022 for the 2022 notes. The fixed spread is 72 basis points for the 2023 notes and 57 bps for the 2022 notes.

Pricing was to be determined at 10 a.m. ET on July 5.

Holders will also receive accrued interest up to but excluding the applicable settlement date.

HCP expects to settle the tenders on July 8.

Tenders could be withdrawn at any time prior to midnight ET at the end of July 3.

The offers were subject to a financing condition, which has been met, but were not subject to minimum tender conditions.

Mizuho Securities USA LLC (212 205-7736 or 866 271-7403), Credit Suisse Securities (USA) LLC (212 538-2147 or 800 820-1653) and Scotia Capital (USA) Inc. (800 372-3930) are dealer managers for the tender offers.

Global Bondholder Services Corp. (866 470-4500 for bankers and brokers or 212 430-3774 for all others) is the tender and information agent.

Irvine, Calif.-based HCP is a real estate investment trust that invests primarily in real estate serving the health care industry.

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