CNL Healthcare Properties Refinances $600 Million Credit Facilities
CNL Healthcare Properties, Refinances $600 Million Credit Facilities, a publicly registered non-traded limited liability company, reported that they have negotiated and executed the refinancing of $600 million in corporate credit facilities, six months prior to their maturity.
On Dec. 7, 2023, CNL Healthcare Properties Inc.’s operating partnership, CHP Partners LP as borrower, KeyBank National Association as administrative agent, entered into a credit agreement providing for a $250 million senior unsecured revolving credit facility and a $350 million senior unsecured term loan facility, each with a maturity date of May 31, 2026.
According to the company, this effectively maintains their “already low” aggregate leverage ratio of under 31%.
“We began detailed work and conversations with our senior unsecured group of banks about refinancing opportunities well before the May 2024 maturity of our unsecured credit facilities,” said Stephen H. Mauldin, president and chief executive officer.
Currently, CNL says corporate credit facilities make up the overwhelming majority of the company’s debt, or just under 94% of its debt outstanding as of the end of the third quarter. The refinancing was a “vital corporate initiative to support the ongoing health of our company and is a significant achievement given the persisting challenging credit and debt capital markets, which has begun to leave many real estate owners without supportive or economically viable financing options.”
Current corporate credit facility financing commitments range from $25 million to $117.5 million from a diverse syndicate of 11 banks, including two new lenders to the company.
In addition, since the onset of the pandemic, the company says they have been “navigating the operational challenges” in the seniors housing industry, including, most recently, pressure on overall expenses due to the inflationary environment.
“Our management team continues to prioritize expense containment and find creative ways to positively impact items within our control,” said Mauldin. “Additionally, while there has been steady and good improvement in our portfolio’s occupancy, rebuilding occupancy has been slower than initially expected. This is a sentiment shared by CNL Healthcare Properties and the broader seniors housing sector.”
CNL Healthcare Properties closed its offering in September 2015 after raising more than $1.7 billion in investor equity. The company’s real estate portfolio consisted of interests in 72 properties, including 71 senior housing communities and one vacant land parcel.
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