Health Care REIT, Inc. (HCN), a real estate investment trust (REIT), recently announced that it has priced its underwritten public offering of 26 million shares at $56.00 each to enhance its liquidity. In a bid to cover over-allotments, the company will provide a 30-day option to the underwriters for purchase of an additional 3.9 million shares.
Health Care REIT intends to utilize the gross proceeds of $1.5 billion generated from the transaction for a couple of outstanding payments. These include advances under its unsecured lines of credit, outstanding debts and for other general corporate purposes, besides investment in health care and seniors housing properties.
BofA Merrill Lynch, the investment banking and wealth management division of Bank of America Corporation (BAC); J.P. Morgan - part of J.P Morgan Chase & Co (JPM); Morgan Stanley (MS) - a global financial firm; Deutsche Bank Securities - part of Deutsche Bank AG (DB); Wells Fargo Securities - part of Wells Fargo & Company (WFC); and Key Banc Capital Markets - part of KeyCorp (KEY) acted as joint book-running managers for the offering.
At the end of the second quarter 2012, the company had cash and cash equivalents of $204.9 million. Health Care REIT usually has long-term triple-net leases in senior housing and healthcare real estate properties that insulate it from market volatility and provide a steady source of revenue despite a challenging macroeconomic environment.
Health Care REIT invests across the full spectrum of senior housing and health care real estate properties. Headquartered in Toledo, Ohio, Health Care REIT also provides an extensive array of property management and development services.
Health Care REIT currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain our long-term Neutral recommendation on the stock.