Ensign Group acquires post-acute care campus in Arizona » 06:1008/0308/03/20
Ensign Group acquired the…
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|Over a week ago|
Ventas enters revised master lease agreement with Brookdale Senior Living » 07:4407/2707/27/20
Ventas (VTR) announced…
Ventas (VTR) announced that it has entered into a revised master lease agreement and other agreements with Brookdale Senior Living (BKD) in response to the challenges to the senior living industry caused by the COVID-19 pandemic. The agreements provide substantial financial benefits and certainty for both companies by modifying their current arrangements as follows: Ventas received up-front consideration approximating $235M, which replaces over two and a half years of the cash rent reduction effectuated under the Brookdale lease, consisting of: $162M in cash including $47M from the release of deposits that Ventas held under the Brookdale Lease. Also, $45M cash pay note from Brookdale. The Note has an initial interest rate of 9%, increasing 50 basis points per annum, and matures on December 31, 2025. Warrants exercisable for 16.3M shares of Brookdale common stock, representing 8% of Brookdale's fully diluted shares on a post-exercised basis. The warrants, which are exercisable at any time prior to December 31, 2025, have an exercise price of $3.00 per share. Base cash rent, under the Brookdale Lease, which covers 121 senior living communities, is now set at $100M per annum starting in July, with 3% annual escalators commencing on January 1, 2022, compared to $182M annualized cash rent paid in Q1. The Brookdale Lease is guaranteed by, and the note is a direct obligation of, Brookdale. The base term of the Brookdale lease remains unchanged through December 31, 2025. Brookdale continues to have two 10-year extension options at the greater of escalated rent and fair market rent. In order to provide Brookdale with stability due to COVID-19, Ventas removed the financial covenants in the Brookdale Lease. It also modified certain of the change of control provisions previously contained in the Brookdale Lease. Ventas has the right to convert some or all of the assets in the Ventas-Brookdale portfolio to a management contract, change operators and/or dispose of assets. In addition, Brookdale is transferring full ownership of five senior living properties to Ventas, in full satisfaction and repayment of a $78M loan to Brookdale from Ventas that were secured by the five communities. Brookdale will now manage those communities for Ventas under a terminable management agreement. The communities contain 471 units and generated Q1 annualized EBITDAR exceeding $5M. Annual interest income on the $78M loan, which was scheduled to mature on September 30, 2021, was $7M. The Ventas board considered the potential for revised arrangements with Brookdale in setting its Q2 dividend. Brookdale paid all contractual rent at the previous rate through June and at the revised rate in July. Annualized property-level EBITDAR in Q1 for the Ventas-Brookdale portfolio under the Brookdale lease was $136M. Adjusted for the agreements, trailing twelve-month EBITDAR and EBITDARM cash rent coverage under the Brookdale Lease through March 31 improves to over 1.3x and 1.6x respectively. Ventas expects to recognize the full value of the up-front consideration received from Brookdale ratably over the remaining base term of the Brookdale Lease.
Brookdale Senior Living announce multi-part transaction with Ventas » 07:3307/2707/27/20
Brookdale Senior Living…
Brookdale Senior Living (BKD) announced that it has entered into definitive agreements with Ventas (VTR) to restructure its 120 community triple-net master lease arrangements. In addition, the company has sold to Ventas five assets formerly collateralizing Ventas loan financing in full satisfaction of the loan, and will manage the communities following the close of the asset sale. Asset sale key terms: Brookdale transferred its interest in five communities to Ventas in full satisfaction of approximately $78M of debt secured by the communities that was scheduled to mature September 30, 2021. The five properties generated approximately $5M in community level operating income for the 12 month period ending March 31, 2020. Following closing of the asset sale, Brookdale will operate the five communities under terminable, market rate management agreements.
|Over a month ago|
House COVID-19 panel to investigate for-profit nursing homes, Politico reports » 14:0306/1606/16/20
The House committee…
The House committee overseeing the federal response to the COVID-19 pandemic is initiating a sweeping probe into the nation's five biggest for-profit nursing home companies, demanding information about their structure, executive compensation, and preparedness for the coronavirus crisis, Politico's Kyle Cheney and Rachel Roubein report. House Majority Whip James Clyburn, who heads the COVID-19 panel, sent letters to the federal Centers for Medicare and Medicaid Services, as well as the five companies, seeking details about whether CMS properly managed the pandemic in nursing homes, the authors say. The five companies Clyburn is reaching out to, namely Genesis HealthCare (GEN), Life Care Centers of America, Ensign Group (ENSG), SavaSeniorCare, and Consulate Health Care, operate over 850 facilities for 80,000 residents across 40 states, the authors note. Reference Link
Ensign Group price target raised to $50 from $46 at SunTrust » 09:1406/1106/11/20
SunTrust analyst David…
SunTrust analyst David MacDonald raised the firm's price target on Ensign Group to $50 from $46 but keeps a Hold rating on the shares. The analyst says his virtual NDR with the company management highlighted its "solid core trends, attractive strategic positioning, and ongoing capital deployment opportunities". MacDonald adds that COVID-19 outbreak has caused disruption and challenges within the skilled nursing industry, but he sees Ensign as a "sophisticated and high-quality" provider.
HHS announces nearly $4.9B distribution to nursing homes impacted by COVID-19 » 13:3105/2205/22/20
SBRA, PEAK, WELL, BKD
The U.S. Department of…
The U.S. Department of Health and Human Services is announcing it has begun distributing billions in additional relief funds to skilled nursing facilities to help them combat the devastating effects of this pandemic. Nursing homes play a pivotal role in providing skilled care to our nation's vulnerable seniors. During this pandemic, nursing homes have faced unique challenges as their population of high risk seniors are more vulnerable to respiratory pathogens like COVID-19. This funding, which supplements previously announced provider relief funds, will be used to support nursing homes suffering from significant expenses or lost revenue attributable to COVID-19. "This funding secured by President Trump will help nursing homes keep the seniors they care for safe during the COVID-19 pandemic," said HHS Secretary Alex Azar. "The Trump Administration is providing every resource we can, from funding and direct PPE shipments to regulatory flexibility and infection control consultations, to protect seniors in nursing homes and those who care for them." Publicly traded companies in the sector include Sabra Health Care (SBRA), Healthpeak (PEAK), Welltower (WELL) and Brookdale Senior Living (BKD). Reference Link
Ensign Group backs FY20 EPS view $2.50-$2.58, consensus $2.46 » 16:5305/1105/11/20
Backs FY20 revenue view…
Backs FY20 revenue view $2.42B-$2.45B, consensus $2.41B. The company said "We are maintaining our 2020 annual earnings guidance of $2.50 to $2.58 per diluted share and annual revenue guidance of $2.42 billion to $2.45 billion. We are confident that we can provide this guidance for several reasons, including our better-than-expected results in the first quarter, which under normal circumstances would have led to an increase in guidance, the implementation of certain cost reduction initiatives and the positive news in both reimbursement and stimulus funding. He noted again that the company has seen, and expects to continue to see, a significant impact from the pandemic on second quarter and bleeding into the third quarter. But he also emphasized that the company is seeing signs of stabilization in occupancy in many markets. The company is optimistic that occupancies will continue to recover in the second half of the year as hospitals reopen and vital elective procedures begin to take place."
Ensign Group reports Q1 adj. EPS 77c, consensus 62c » 16:5105/1105/11/20
Reports Q1 revenue…
Reports Q1 revenue $589.61M, consensus $582.82M. Same store occupancy for the quarter was 80.1%, an increase of 28 basis points over the prior year; and same store skilled managed care and Medicare revenue was up 11% and 13.4%, respectively.
Brookdale Senior Living reports Q1 revenue $1.01B, consensus $998.07M » 16:5605/0505/05/20
Reports Q1 Same community…
Reports Q1 Same community revenue grew 2.0% year over year and 2.4% sequentially. The company said "Our top priority is the health and safety of our residents, patients and associates. During this pandemic, we moved swiftly to update our strong and well-established infectious disease protocols for COVID-19 and to increase communication and training on these protocols. As public health officials' knowledge rapidly and continuously expanded, we took the unprecedented actions of implementing a non-essential, no-visitor directive across all our communities nationwide. We also started to incur additional expenses to help limit the spread of the virus. We recognize these measures will continue to have a near-term financial impact. Even so, these steps were necessary, given the critical role we play within the healthcare system to care for the most vulnerable segment of the population. We believe our efforts will ultimately strengthen our long-term growth opportunity. I am immensely proud of our dedicated Brookdale associates and their outstanding efforts to serve on the front line, taking actions to care for our residents and patients and to help protect them."
|Over a quarter ago|
Ensign Group acquires two skilled nursing facilities in Colorado » 06:0803/0303/03/20
The Ensign Group…
The Ensign Group announced that it acquired the operations of two skilled nursing facilities located in Commerce City, Colorado. The acquisitions were effective March 1 and will be subject to long-term, triple net leases. The acquisitions include Ridgeview Post Acute, a skilled nursing facility with 105 skilled nursing beds and Irondale Post Acute, a skilled nursing facility with 83 skilled nursing beds.