MPT Lands $1.7B Recap and Debt Financing for Massachusetts Hospital Portfolio

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Medical Properties Trust (MPT) has sealed a $1.7 billion equity recapitalization and debt financing of a portfolio of eight inpatient general acute care hospitals in Massachusetts, the company announced.

Apollo provided a roughly $920 million loan in the deal, sources said.

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MPT formed a joint venture with Macquarie Infrastructure Partners V, a private fund managed by Macquarie Asset Management (MAM), to form a partnership whereby a MAM-controlled subsidiary acquired a 50 percent interest in the portfolio, which is operated by Steward Health Care System.

The hospitals are located in Brighton, Methuen, Haverhill, Brockton, Fall River, Taunton, Ayer and Dorchester.

“At MPT, we have long understood the embedded value in our entire portfolio as well as the proficiency of operators such as Steward,” Edward K. Aldag, MPT’s chairman, president and CEO, said in a statement. “The closing of this transaction provides independent confirmation of the value that sophisticated investors and lenders also attribute to well-underwritten hospital investments.”

CBRE advised MPT in sourcing a new equity partner to recapitalize the assets, and also arranged debt for the newly formed joint venture.

Keith Harris of CBRE’s operational real estate group, based in London, partnered with Lee Asher, Chris Bodnar, Ryan Lindsley and Jordan Selbiger of CBRE’s U.S. health care and life sciences capital markets group to advise MPT in the recapitalization of the assets.

CBRE debt advisory specialist James Millon arranged the financing for the new joint venture.

Including the non-recourse debt, total cash proceeds to MPT were approximately $1.3 billion, virtually all of which was used to repay debt.

“This was a rare opportunity for an investor to partner with MPT to recapitalize the largest acute care hospital portfolio to come to market,” Asher said. “These are unique inpatient assets in critical health care markets in Massachusetts, and we believe the newly formed joint venture will successfully support Steward’s hospital operations and mission to deliver the highest quality care to its patients.”

Officials at Apollo declined to comment.

Emily Fu can be reached at efu@commercialobserver.com.