Sabra Health Care amends credit agreement, ups multicurrency capacity

By Mary-Katherine Stinson

Lexington, Ky., Jan. 5 – Sabra Health Care REIT, Inc.’s wholly owned subsidiaries Sabra Health Care LP and Sabra Canadian Holdings, LLC entered a sixth amended and restated credit agreement on Jan. 4, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement includes a $1 billion revolving credit facility, a $430 million term loan and a C$150 million term loan.

Up to $350 million of the revolving facility may be used for borrowings in certain foreign currencies, which is increased from $175 million in the prior agreement.

The accordion feature that can increase the total available borrowings to $2.75 billion is unchanged from the prior agreement, subject to terms and conditions.

The revolver matures Jan. 4, 2027 and includes two optional six-month extensions.

The dollar denominated term loan and the Canadian dollar term loan both mature Jan. 4, 2028.

Borrowings under the revolving facility bear interest at SOFR plus 100 basis points in addition to a debt ratings-based interest margin ranging from 77.5 bps to 145 bps annually.

The term loans bear interest on the outstanding principal amount at either SOFR for dollar-denominated loans or CDOR for Canadian dollar loans plus a debt ratings-based applicable interest margin ranging from 85 bps to 165 bps annually.

There is a facility fee ranging between 12.5 bps and 30 bps based on the total amount of commitments under the revolving facility regardless of amounts outstanding.

The credit agreement also requires Sabra, through the operating partnership, to comply with specified financial covenants including a maximum total leverage ratio, a maximum secured debt leverage ratio, a minimum fixed-charge coverage ratio, a maximum unsecured leverage ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio.

Obligations are guaranteed by Sabra and certain subsidiaries.

The prior credit agreement entered into on Sept. 9, 2019 included a $1 billion revolving credit facility, $1.1 billion in term loans and a C$125 million term loan.

Bank of America, NA is the administrative agent and letter of credit issuer.

Citizens Bank, NA, Credit Agricole CIB and Wells Fargo Bank, NA are the co-syndication agents and letter of credit issuers.

Bank of Nova Scotia, Fifth Third Bank, JPMorgan Chase Bank, NA, Keybank NA, Mizuho Bank, Ltd. and Truist Bank are co-documentation agents.

BofA Securities, Inc. is the joint lead arranger and sole bookrunner; and Citizens Bank, NA, Credit Agricole and Wells Fargo join as joint lead arrangers.

Sabra is an Irvine, Calif., real estate investment trust specializing in the health care sector.

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