Kindred Healthcare could face loan default if master lease dispute is unresolved

By Sara Rosenberg

New York, June 19 - Kindred Healthcare Inc. could potentially be in default under its $400 million amended and restated credit facility if it is found to be in default under its master lease agreements with Ventas Inc., according to a company news release.

On June 14, Ventas delivered a letter to JPMorgan, the agent on the Kindred credit facility, claiming that an event of default exists under the master lease agreements because of Kindred's refusal to turn over to Ventas its fair market rental appraisals as part of a rent reset process. Ventas has given Kindred until July 9 to cure the default.

In reaction, Kindred has filed a lawsuit seeking injunctive and declaratory relief, saying that Ventas' position is a meritless ploy designed to obtain materials to which it has no entitlement, so as to afford it an unfair advantage in the rent reset process.

Kindred is a Louisville, Ky.-based operator of hospitals, nursing centers, institutional pharmacies and a contract rehabilitation services business.

Ventas is a Louisville, Ky.-based health care real estate investment trust that leases 39 hospitals and 186 nursing centers to Kindred.

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