Lancaster Pollard served as the syndication agent on a $400 million refinance of a credit facility for California-based skilled nursing operator Plum Healthcare Group, marking the latest in a string of big-dollar skilled nursing facility portfolio refinancings.
Credit Suisse served as the lender for the transaction, working with the Columbus, Ohio-based Lancaster Pollard to design the interim credit facility within underwriting criteria for Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA) financing.
The deal refinances the debt for a 27-property skilled nursing portfolio and serves as a bridge funding in preparation for an upcoming HUD/FHA-insured mortgage takeout financing. The $400 million transaction refinanced all of Plum’s previous corporate term loan credit facility.
“Redesigning our capital structure for the emerging market is a key tenet of our strategic plan which is focused on further enhancing our industry leading clinical and patient outcomes, and aligning our business to capitalize on developing long term growth opportunities in the healthcare space,” Naveed Hakim, chief financial officer of Plum Healthcare Group, said.
The fact that all the facilities are located in California is part of what made the deal so large on a dollar basis, Grant Goodman, the Lancaster Pollard vice president who led the deal for the firm, told Skilled Nursing News. From term to close, the process took about 100 days, he added.
Goodman and Jason Dopoulos, the Lancaster Pollard senior managing director who also worked on the deal, said the target to close all 27 facilities with HUD is about seven to nine months from the submission of the HUD/FHA application. That paperwork will be submitted in about two weeks, they told SNN.
“HUD closes in batches; it’s hard for them as an organization to close 27 facilities at one time,” Dopoulos explained. “So we’ll probably submit in three different tranches … Obviously we want to go as fast as we can for [Plum] to get their long-term fixed rate debt in place.”
Credit Suisse’s partnership in the deal — its first major bridge loan in the space, according to Dopoulos — was especially important because of the bank’s ability to take on the full loan, they both added.
“The reason Plum liked it is that [many] commercial banks in our space… they do a great job, but they can’t hold $400 million on the balance sheet,” Dopoulos noted. “[Credit Suisse] could take on the whole thing themselves, so there’s no risk of syndication. That was one thing that was important to the client, certainty of execution.”
Joe Munhall and Elliot Kaple also worked on the deal for Lancaster Pollard.
A subsidiary of ORIX Corporation USA, Lancaster Pollard offers mergers-and-aquisitions advisory, investment banking, and other financial services.
Written by Maggie Flynn