HCP Expands Credit by $750M

IRVINE, Calif. — HCP Inc. (NYSE: HCP), an Irvine-based healthcare REIT, has closed an amended and restated credit agreement providing for a $2.5 billion unsecured revolving credit facility and a new $250 million unsecured term loan facility.

The amendment and restatement increased the size of the unsecured revolving credit facility from $2 billion; extended the maturity date of the unsecured revolving credit facility to May 23, 2023 with two 6-month extension options; and reduced HCP’s borrowing costs.

As of closing, the unsecured revolving credit facility features an annual interest rate equal to LIBOR plus 82.5 basis points and has a facility fee on the entire revolving commitment of 15 basis points per year, each based on HCP’s current credit ratings.

In addition, the unsecured revolving credit facility incorporates a sustainability-linked pricing grid that reduces the borrowing spread if certain benchmarks are achieved each year.

The unsecured term loan facility includes a 90-day delayed-draw feature, allowing term loans in an aggregate principal amount of up to $250 million. Any such term loans will mature on May 23, 2024. As of closing, the iannual nterest rate would have been equal to LIBOR plus 90 basis points, based on HCP’s current credit ratings. The unsecured term loan facility was undrawn at closing.

HCP has the option to increase its borrowing capacity under the Credit Facilities, subject to customary conditions, by up to an additional $750 million, for a maximum borrowing capacity of $3.5 billion.

“This transaction highlights our continued focus on improving our credit profile by enhancing liquidity, extending maturities and reducing borrowing costs,” says Peter Scott, executive vice president and chief financial officer.

BofA Securities Inc., JPMorgan Chase Bank NA and Wells Fargo Securities LLC arranged the credit transactions. BofA Securities and JPMorgan were also joint bookrunners. Bank of America NA acted as administrative agent and JPMorgan and Wells Fargo Bank, National Association acted as co-syndication agents.