CNL Healthcare, CHP Partners enter new $600 million credit agreement

By William Gullotti

Buffalo, N.Y., Dec. 12 – CNL Healthcare Properties, Inc.’s operating partnership CHP Partners, LP signed a new $600 million credit agreement with KeyBank NA as administrative agent on Dec. 7, according to an 8-K filing with the Securities and Exchange Commission on Tuesday.

A $250 million revolver and a $350 million term loan facility, each maturing May 31, 2026, make up the new agreement. The facilities entirely replace all previous unsecured credit facilities of the company and its subsidiaries, which were repaid and terminated at closing.

Borrowings from each facility will bear interest at SOFR plus a 225 basis point margin.

The unused revolver commitments are also subject to a facility fee of either 15 bps or 20 bps, determined by the usage of the revolver.

The operating partnership is required to maintain a pool of at least 25 unencumbered pool assets with a minimum value of $500 million and a weighted average occupancy of at least 80%. Additionally, CNL must maintain a ratio of unsecured indebtedness to the value of unencumbered assets equal to or less than 60%. There are additional covenants related to the unencumbered assets, including limitations on geographical concentration, tenant concentration and aggregate weighted average lease term.

The agreement also includes financial covenants that CNL must meet on a consolidated basis, including covenants related to maximum leverage ratio of 40%, minimum fixed charge coverage ratio of 1.5 to 1.0, minimum consolidated tangible net worth, maximum secured indebtedness, maximum secured recourse indebtedness, and other asset-level and guaranty restrictions. Additionally, the company’s regular cash distributions are not permitted to exceed the greater of 70% of funds from operations or the amount required to be paid out for the company to maintain its REIT status.

KeyBanc Capital Markets, Truist Securities, Inc., Credit Agricole CIB and Manufacturers and Traders Trust Co. are the joint lead arrangers.

Credit Agricole and Manufacturers and Traders Trust are also acting as co-syndication agents alongside Truist Bank. Capital One, NA is the documentation agent.

CNL is an Orlando, Fla.-based real estate investment trust with a focus on the senior housing and health-care sectors.

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