Community Healthcare Trust Increases Credit Facilities to $400 Million with a New $125 Million Term Loan, Extends Revolver, and Removes Security Provisions

Rhea-AI Summary

Community Healthcare Trust Incorporated (NYSE: CHCT) announced an increase in its credit facilities to $400 million via its Third Amended and Restated Credit Agreement. The agreement includes a $150 million revolving facility maturing in March 2026 and $250 million in term loans. The term loans feature maturity dates from March 2024 to March 2028. The company drew down $125 million from the new term loan to pay off existing obligations. This facility allows for potential future increases up to $600 million and includes interest rate swaps for cost management.

Positive

• Increased credit facilities to $400 million, enhancing liquidity.
• Accordion feature allows borrowing capacity increase to $600 million.
• Ability to restructure existing debt, improving financial flexibility.

Negative

• Unsecured obligations may expose the company to higher financial risk.
• Variable interest rates tied to LIBOR may result in increased borrowing costs.

FRANKLIN, Tenn., March 19, 2021 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") announced it has increased its credit facilities to $400 million through its Third Amended and Restated Credit Agreement. 

The amended credit facilities provide for a $150 million revolving facility maturing March 2026, with one 12-month extension option and $250 million in term loans. The term loans consist of $50 million maturing in March 2024, $75 million maturing in March 2026, and a new, $125 million term loan maturing in March 2028.  The Company is the borrower under the Third Amended and Restated Credit Agreement, and its obligations are not secured.

Amounts outstanding will bear interest under the revolving facility at LIBOR plus a margin of between 1.25% and 1.90%, and under the term loans at LIBOR plus a margin of between 1.45% and 2.30%, depending on the maturity and the Company's leverage.

The credit facilities have an accordion feature that allows the total borrowing capacity under the credit facility to be increased to $600 million, including the ability to add and fund additional term loans. The accordion and revolving facility extension options are subject to normal terms and conditions for these types of facilities.

At closing, the Company drew down the entire $125 million available under the new term loan and used the proceeds to paydown the revolving facility as well as to repay its existing $50 million term loan with a March 2022 maturity.

The Company intends to enter into interest rate swap agreements that fix the interest rates on the entire $125 million 7-year term loan. Based on current conditions, this will result in fixed interest rates in the range of 3.35% to 3.65% depending on the Company's leverage, market conditions, and other factors.

Truist Securities, Fifth Third Bank, First Horizon Bank, Huntington National Bank, and Regions Capital Markets served as joint lead arrangers and joint book managers, Fifth Third Bank and First Horizon Bank served as co-syndication agents and Huntington National Bank and Regions Bank served as co-documentation agents. Truist Bank served as administration agent. Other banks in the syndication include:  Pinnacle Bank, Synovus Bank, Hancock Whitney Bank, Cadence Bank, Renasant Bank, CapStar Bank, and ServisFirst Bank.

About Community Healthcare Trust Incorporated

Community Healthcare Trust is a real estate investment trust that focuses on owning income-producing real estate properties associated primarily with the delivery of outpatient healthcare services in its target sub-markets throughout the United States. The Company had investments of approximately $735.4 million in 141 real estate properties as of December 31, 2020, located in 33 states, totaling approximately 3.1 million square feet.

Additional information regarding the Company, including this quarter's operations, can be found at www.chct.reit.  Please contact the Company at 615-771-3052 to request a printed copy of this information.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "believes", "expects", "may", "should", "seeks", "approximately", "intends", "plans", "estimates", "anticipates" or other similar words or expressions, including the negative thereof. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Because forward-looking statements relate to future events, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. Thus, the Company's actual results and financial condition may differ materially from those indicated in such forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company's common stock, changes in the Company's business strategy, availability, terms and deployment of capital, the Company's ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, changes in the real estate industry in general, interest rates or the general economy, adverse developments related to the healthcare industry, the degree and nature of the Company's competition, the ability to consummate acquisitions under contract, effects on global and national markets as well as businesses resulting from the COVID-19 pandemic, and the other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and the Company's other filings with the Securities and Exchange Commission from time to time. Readers are therefore cautioned not to place undue reliance on the forward-looking statements contained herein which speak only as of the date hereof.  The Company intends these forward-looking statements to speak only as of the time of this release and the Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments, or otherwise, except as may be required by law.

CONTACT: David H. Dupuy, 615-771-3052

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SOURCE Community Healthcare Trust, Inc.

FAQ

What is the significance of CHCT's $400 million credit facility announcement?

The increase in credit facilities enhances CHCT's liquidity and financial flexibility for future investments.

What are the maturity dates for CHCT's new term loans?

The new term loans include maturities from March 2024 to March 2028.

How does the accordion feature benefit CHCT?

The accordion feature allows CHCT to increase its borrowing capacity up to $600 million as needed.

What risks are associated with CHCT's unsecured obligations?

Unsecured obligations may subject CHCT to higher financial risk without collateral backing.

How does the interest rate structure affect CHCT's financials?

CHCT's interest rates are tied to LIBOR, leading to potential increases in borrowing costs based on market conditions.