Omega Healthcare enters $400 million two-year senior term loan

By Marisa Wong

Los Angeles, Aug. 11 – Omega Healthcare Investors, Inc. announced it entered into a new two-year $400 million senior unsecured term loan.

The term loan matures on Aug. 8, 2025, with two 12-month extension options, according to a press release.

The term loan includes an accordion feature that permits the company to expand its borrowing capacity to an aggregate of up to $500 million.

Borrowings will bear interest at a rate consistent with the company’s existing $50 million term loan equal to term or daily simple SOFR plus a spread of between 85 basis points and 185 bps, determined based on the company’s credit rating.

The company also executed $400 million of variable-to-fixed interest rate swaps that fix the SOFR variable component of the term loan at 4.015% for four years. Based on the company’s current BBB- credit rating and giving effect to the related swaps, the term loan will bear interest at an all-in fixed rate of 5.565%.

The entire amount of the term loan will be funded on Aug. 14, concurrent with the starting of the forward swaps.

Commitments were provided by a syndication of 14 financial institutions. BofA Securities, Inc. is joint lead arranger and bookrunner. Bank of America, NA is the administrative agent. Citizens Bank, NA, Credit Agricole CIB, JPMorgan Chase Bank, NA and Wells Fargo Bank, NA are joint lead arrangers and co-syndication agents. Bank of Nova Scotia, Huntington National Bank, M&T Bank, MUFG Bank Ltd., Regions Bank, Royal Bank of Canada and Truist Bank are co-documentation agents.

Chief financial officer Bob Stephenson said in the release, “The new term loan will fully replenish the $350 million of cash we used to repay our [Aug. 1, 2023] bond maturity. This transaction further enhances our strong balance sheet, providing additional liquidity, interest rate certainty, and financial flexibility.”

“In addition to the balance sheet cash provided by the term loan, we have our entire $1.45 billion revolving credit facility and over $700 million remaining under our ATM equity shelf program available to fund future investments and repay debt maturities, including our $400 million in debt due in April 2024,” Stephenson added.

Omega is a Hunt Valley, Md.-based real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets spans all regions within the United States, as well as in the United Kingdom.

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