S&P views Medical Properties negatively

S&P said it changed its outlook for Medical Properties Trust Inc. to negative from stable and affirmed the BB+ ratings on the issuer and its senior unsecured notes.

“Material upcoming debt maturities threaten to pressure Medical Properties Trust's liquidity position. Starting in 2025, it has more than $1.4 billion of debt due in each of the next three years through 2027. While the company's current liquidity position is adequate due to more modest debt maturities in 2023 and 2024, with proceeds from asset sales earmarked for debt repayment, it may come under significant pressure beginning in 2025,” S&P said in a press release.

The agency also noted the trust’s bond spreads have significantly widened and the stock price has plummeted more than 70% from its peak, which will pressure the company’s cost of capital.

On the plus side, Medical Properties Trust has a track record of reaping substantial proceeds from asset sales. In 2022, the company generated almost $2.2 billion of net proceeds from asset sales and sold somewhat under $500 million through the first half of 2023.

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