Brookdale refinances $300 million debt, boosts liquidity

NASHVILLE - Brookdale Senior Living Inc. (NYSE: NYSE:BKD), a leading operator of senior living communities, has successfully completed the advance refinancing of over $300 million of its debt due in 2027, while also enhancing its liquidity position. According to InvestingPro data, the company manages total debt of $5.19 billion, with a current ratio of 0.81 indicating tight liquidity management.

On December 20, 2024, Brookdale secured a $344.2 million loan through its Master Credit Facility Agreement with JLL Real Estate Capital, LLC, leveraging Fannie Mae (OTC:FNMA)'s DUS Program. This loan was used to repay $312.5 million of variable rate debt that was set to mature in September 2027. The newly acquired debt is supported by first priority mortgages on 47 of the company's communities, which also back approximately $435 million of additional outstanding mortgages.

The terms of the new loan include a fixed interest rate of 6.14%, with interest-only payments for the initial two years, and a maturity date in January 2032. This refinancing allows Brookdale to benefit from a lower interest rate compared to the 7.20% variable rate of the debt being repaid.

Dawn Kussow, Brookdale's Executive Vice President and Chief Financial Officer, highlighted the strategic move, stating, "Demonstrating ongoing proactive management of our balance sheet, we once again completed a beneficial financing transaction to address a future debt maturity at a favorable rate." She expressed gratitude towards Fannie Mae and JLL for their continued partnership.

Brookdale Senior Living operates a network of independent living, assisted living, memory care, and continuing care retirement communities across 41 states. As of September 30, 2024, the company manages 648 communities capable of serving around 58,000 residents. With annual revenue of $2.95 billion and a market capitalization of $1.01 billion, Brookdale's shares are publicly traded on the New York Stock Exchange, currently trading near its 52-week low at $5.12. InvestingPro subscribers can access additional financial metrics and expert analysis through the platform's comprehensive Pro Research Report.

The information in this article is based on a press release statement from Brookdale Senior Living Inc.

In other recent news, Brookdale Senior Living reported robust growth in its third-quarter performance, with a 15% increase in adjusted EBITDA and a substantial rise in adjusted free cash flow. The company's occupancy rate also increased by 80 basis points, surpassing industry averages. These developments were accompanied by strategic acquisitions and successful refinancing of debt, contributing to Brookdale's solid growth. In addition, the company's HealthPlus program has made significant strides, reducing emergency visits and hospitalizations considerably.

In a significant move to enhance financial stability, Brookdale amended its lease agreement with Ventas Inc (NYSE:VTR)., a real estate investment trust. Under the new terms, Brookdale will continue to lease 65 properties, while Ventas will either sell or transition the remaining 55 non-renewal properties. This restructuring is particularly crucial given Brookdale's significant debt burden.

Jefferies has maintained a Buy rating on Brookdale, highlighting the resolution of a significant capital structure uncertainty following the amendment of the Ventas leases. This move is seen as clearing the way for management to focus on execution and growth. The firm anticipates that Brookdale will benefit from favorable demographic trends and a favorable balance between supply and demand, contributing to increased EBITDA and free cash flow, fostering accelerated growth in the forthcoming years. These are recent developments that investors should be aware of.

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