Medical Properties Trust Announces Closing of Sale of Seven Australian Hospitals

Rhea-AI Summary

Medical Properties Trust, Inc. (MPT) has completed the sale of seven Australian hospitals for AUD$730 million, using the proceeds to reduce its Australian term loan. MPT also gained AUD$20 million from settling its interest rate swap. The company expects to close the remaining AUD$470 million in property sales and debt repayment this quarter. The valuation of MPT's Australian portfolio implies a 5.7% cap rate, which bodes well for similar assets in its U.S. and Western Europe portfolios.

Positive

• MPT completed the sale of seven Australian hospitals for AUD$730 million
• MPT gained AUD$20 million from settling its interest rate swap
• The valuation of MPT's Australian portfolio implies a 5.7% cap rate, which is positive for similar assets in its U.S. and Western Europe portfolios

Negative

• None.

BIRMINGHAM, Ala.--(BUSINESS WIRE)-- Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced that it has completed, as expected, the sale of seven Australian hospitals for AUD$730 million, with proceeds used to reduce its Australian term loan. MPT additionally settled the pro rata portion of its interest rate swap for a gain of AUD$20 million. The Company expects to close the remaining AUD$470 million in property sales and debt repayment during the current quarter. The 5.7% cap rate implied in the AUD$1.2 billion valuation of MPT’s Australian portfolio provides a strong read-through for similar assets in the Company's U.S. and Western Europe portfolios.

About Medical Properties Trust, Inc.

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world’s largest owners of hospital real estate with 436 facilities and approximately 44,000 licensed beds in ten countries and across four continents. MPT’s financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.

This press release includes 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. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “would”, “could”, “expect”, “intend”, “plan”, “estimate”, “target”, “anticipate”, “believe”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding our strategies, objectives, future expansion and development activities, and expected financial performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results or future events to differ materially from those expressed in or underlying such forward-looking statements, including, but not limited to: (i) the economic, political and social impact of, and uncertainty relating to, potential impact from health crises (like COVID-19); (ii) the ability of our tenants, operators and borrowers to satisfy their obligations under their respective contractual arrangements with us, especially as a result of the adverse economic impact of the COVID-19 pandemic, and government regulation of hospitals and healthcare providers in connection with same (as further detailed in our Current Report on Form 8-K filed with the SEC on April 8, 2020); (iii) our expectations regarding annual guidance for net income and NFFO per share; (iv) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate acquisitions and investments; (v) the nature and extent of our current and future competition; (vi) macroeconomic conditions, such as a disruption of or lack of access to the capital markets or movements in currency exchange rates; (vii) our ability to obtain debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and pay down, refinance, restructure or extend our indebtedness as it becomes due; (viii) increases in our borrowing costs as a result of changes in interest rates and other factors; (ix) international, national and local economic, real estate and other market conditions, which may negatively impact, among other things, the financial condition of our tenants, lenders and institutions that hold our cash balances, and may expose us to increased risks of default by these parties; (x) factors affecting the real estate industry generally or the healthcare real estate industry in particular; (xi) our ability to maintain our status as a REIT for federal and state income tax purposes; (xii) federal and state healthcare and other regulatory requirements, as well as those in the foreign jurisdictions where we own properties; (xiii) the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain equity or debt financing secured by our properties or on an unsecured basis; (xiv) the ability of our tenants and operators to operate profitably and generate positive cash flow, comply with applicable laws, rules and regulations in the operation of the our properties, to deliver high-quality services, to attract and retain qualified personnel and to attract patients; (xv) potential environmental contingencies and other liabilities; (xvi) the risk that the expected sale of three Connecticut hospitals currently leased to Prospect does not occur; (xvii) the risk that MPT’s expected sale of its Australian portfolio does not occur; (xviii) the risk that other property sales, loan repayments, and other capital recycling transactions do not occur; and (xix) the risks and uncertainties of litigation.

The risks described above are not exhaustive and additional factors could adversely affect our business and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and as updated in our quarterly reports on Form 10-Q. Forward-looking statements are inherently uncertain and actual performance or outcomes may vary materially from any forward-looking statements and the assumptions on which those statements are based. Readers are cautioned to not place undue reliance on forward-looking statements as predictions of future events. We disclaim any responsibility to update such forward-looking statements, which speak only as of the date on which they were made.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230523006123/en/

Drew Babin, CFA, CMA

Senior Managing Director – Corporate Communications

Medical Properties Trust, Inc.

(646) 884-9809

dbabin@medicalpropertiestrust.com

Source: Medical Properties Trust, Inc.

FAQ

What did Medical Properties Trust, Inc. (MPT) announce?

MPT announced the completion of the sale of seven Australian hospitals for AUD$730 million.

What did MPT use the proceeds for?

MPT used the proceeds to reduce its Australian term loan.

How much did MPT gain from settling its interest rate swap?

MPT gained AUD$20 million from settling its interest rate swap.

What is the expected amount for property sales and debt repayment?

The expected amount for property sales and debt repayment is AUD$470 million.

What does the valuation of MPT's Australian portfolio imply?

The valuation implies a 5.7% cap rate, which is positive for similar assets in MPT's U.S. and Western Europe portfolios.