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Sabra Health Care REIT's latest senior notes offering boosts liquidity by $72 million, says CFO
By Lisa Kerner
Charlotte, N.C., May 21 - Sabra Health Care REIT, Inc.'s pricing of $200 million of 5 3/8% senior notes due 2023 yesterday "made sense with the rates" and increased liquidity "by about 72 million bucks," said executive vice president and chief financial officer Harold Andrews, Jr.
According to the company's announcement, a portion of the proceeds will be used to redeem up to $113.75 million of the company's 8 1/8% senior notes due 2018. The remaining proceeds will be used to fund future possible acquisitions and for general corporate purposes.
The offer is slated to close on May 23.
As a result of this latest transaction, Sabra's liquidity improved to $320 million from $248 million at March 31. The company has about $450 million of "dry powder," including availability under its ATM, for acquisitions, added lead director Mike Foster.
Andrews and Foster made their comments Tuesday at the Barclays High Yield Bond and Syndicated Loan Conference in Chicago.
About 24% of Sabra's debt is pushed out five years or more, and this latest transaction "puts us in good shape," said Andrews.
In addition, the company issued preferred equity in March, which also lowered the cost of Sabra's debt "significantly."
Sabra may consider refinancing its bond maturing in 2018 and may, in conjunction with the U.S. Department of Housing and Urban Development, refinance debt due in 2015, lowering the interest rate to the "low threes" from 5.6%, according to the Sabra executives.
Currently, the company's all in cash cost of capital is about 5%.
Sabra is an Irvine, Calif.-based real estate investment trust.
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