HCP, Inc (HCP), a real estate investment trust (REIT), has recently priced an offering of $800 million worth of 2.625% senior unsecured notes. The notes are scheduled to mature in February 2020. These notes were priced at 99.729% of the principal amount with a yield to maturity of 2.667%.
The net proceeds from the offering are expected to be utilized to repay outstanding debt under $600 million line of credit, repay notes maturing in 2013, and to fund future investments and acquisitions.
During the third quarter 2012, the company issued $300 million of 3.15% senior unsecured notes scheduled to mature in 2022. The transaction generated net proceeds of approximately $293.7 million. Also the company entered into a credit agreement for a four-year 1.81% unsecured loan worth $215 million. At the end of the quarter, the company had cash and cash equivalents of $96.5 million
HCP is a leading medical REIT in the US with one of the largest and most diversified portfolios in the healthcare sector with exposure to all types of facilities. The product diversity of the company allows it to capitalize on opportunities in different markets based on individual market dynamics, and provides a competitive advantage over its peers.
The company follows a conservative balance sheet by actively managing its debt-to-equity levels and maintaining multiple sources of liquidity like the revolving credit facility, access to capital markets and secured debt providers, and divesture of assets. The financial flexibility enables the company to take advantage of potential investment opportunities that in turn bolsters top-line growth.
HCP currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Health Care REIT, Inc (HCN) also holds a Zacks #3 Rank.
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