Affiliates of Los Angeles-based Prospect Medical Holdings secured $375 million in new financings from third-party lenders, according to a May 24 news release from Medical Properties Trust.
Five things to know:
1. Proceeds will be used to provide Prospect's hospital operations with liquidity and capitalize its managed care business for growth and value creation.
2. Prospect's $250 million asset-backed revolving credit facility has been repaid in full. As a result, the unencumbered borrowing base of government and commercial insurance accounts receivable will provide first lien security for the Medical Properties Trust's delayed draw term loan of up to $75 million.
3. Prospect expects to be free of material debt or lease obligations outside of those to Medical Properties Trust and this new third-party financing.
4. Birmingham, Ala.-based Medical Properties Trust has structured its master leases and security agreements to provide collateral value in addition to its real estate interests, including interests in the equity of Prospect's managed care business.
5. As of March 31, Medical Properties Trust has $1.6 billion in total assets related to Prospect.