HCP Raises Cap to Pay Off Debt - Analyst Blog
February 13 2014 - 4:50PM
Zacks
In order to pay-off its debts, HCP, Inc. (HCP)
is raising capital through $350 million worth notes issuance. The
company expects to reap net proceeds (after expenses) of about
$344.9 million from this senior unsecured notes offering, which
will be used for repaying $240 million outstanding under the
company’s credit line. The remaining proceeds will be utilized for
other corporate needs.
In particular, HCP priced 4.20% senior unsecured notes worth
$350 million at 99.537% of the principal amount. The notes, due
2024, have a yield-to-maturity of 4.257%. Notably, owing to
investors’ demand, the size of this senior unsecured notes offering
was increased. The offering is slated to complete on Feb21, 2014,
upon fulfillment of customary closing conditions.
Notably, reputed financial institutions are assisting HCP as
joint book-running managers in this offering. These are J.P. Morgan
Securities LLC of JPMorgan Chase & Co. (JPM),
Goldman, Sachs & Co. of The Goldman Sachs Group,
Inc. (GS) and Wells Fargo Securities, LLC of Wells
Fargo & Company (WFC).
For HCP, the aforementioned notes offering is a strategic fit as
it will lower debt and consequently the interest expenses. Also,
the increased financial flexibility will enable HCP to pursue its
portfolio enhancement activity that will strengthen its top
line.
Recently, HCP reported fourth-quarter 2013 adjusted FFO (funds
from operations) per share of 76 cents, 2 cents ahead of the Zacks
Consensus Estimate and 4 cents above the prior-year quarter figure.
The results were aided by growth in revenues.
Also, for full-year 2013, HCP’s adjusted FFO per share came in
at $3.01, substantially higher than the prior-year FFO per share of
$2.78. At the end of the year, HCP had cash and cash equivalents of
$300.6 million, up from $247.7 million at the prior-year end.
HCP currently carries a Zacks Rank #3 (Hold).
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.
GOLDMAN SACHS (GS): Free Stock Analysis Report
HCP INC (HCP): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
HCP (NYSE:HCP)
Historical Stock Chart
From Mar 2024 to Apr 2024
HCP (NYSE:HCP)
Historical Stock Chart
From Apr 2023 to Apr 2024