$221M Package Refinances Most of Brookdale’s Near-Term Debt

Brookdale Senior Living (NYSE: BKD) made another move to shore up its financial position during the coronavirus pandemic.

The Brentwood, Tennessee-based owner and operator on Thursday announced it obtained a 10-year, $221 million refinancing package for the majority of its outstanding 2020 and 2021 debt maturities. The refinancing was provided by Newmark Knight Frank (Nasdaq: NMRK) pursuant to Freddie Mac’s Capital Markets Execution Program, and was secured by 27 senior living communities, most of which had previously secured Freddie Mac loans maturing in 2021.

The package includes $157 million of 3.18% fixed rate notes and $64 million of adjustable rate notes with an initial rate of 2.7%, and has refinanced the vast majority of its 2020 and 2021 debt maturities at an initial weighted average loan rate of 3.04%, Executive Vice President and Chief Financial Officer Steven Swain said in a statement.

The move is the latest intended to improve Brookdale’s liquidity as the pandemic enters its sixth month in the U.S., disrupting the senior living industry and the overall economy.

Last week, the operator secured $267 million of non-recourse mortgage debt and terminated its $250 million revolving credit facility. It repaid the outstanding principal amount and cash collateralized letters of credit on the credit facility without payment of any termination fee or penalty.

That package included $191 million of 2.89% fixed rate notes and $76 million of adjustable rate notes with an initial rate of 2.64%. The mortgages were secured by 16 senior living communities, most of which had previously secured Brookdale’s revolving credit facility.

In late July, Brookdale announced a restructuring of its master lease agreement with Chicago-based health care real estate investment trust Ventas (NYSE: VTR), which grants Brookdale up to $500 million in rent reduction over the next five years and gives Ventas a potential equity stake in the company.

Brookdale, the nation’s largest senior housing operator, serves approximately 65,000 residents. It is Ventas’ third-largest tenant, with 121 communities, representing 9% of the REIT’s net operating income — approximately $184 million.

These financial actions come as Brookdale continues to pursue an operational turnaround while also responding to the pandemic.

Brookdale stock ended trading Thursday down 0.18%, to $2.75 per share.

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