HCR ManorCare secures $550 million line of credit as default talks continue with landlord
HCR ManorCare received a $550 million line of credit from private equity firm Centerbridge Partners
Skilled nursing provider HCR ManorCare has not paid up on current and past due rents to real estate investment trust Quality Care Properties Inc., forcing the companies into discussions about an event of default, QCP announced Friday.
ManorCare, once the largest skilled nursing operator in the U.S., was on the hook for nearly $80 million in rent payments to QCP for June and July. But it failed to pay by a July 14 deadline imposed by the landlord. Of that amount, the provider had paid just $8.2 million, the Toledo Blade reported Friday.
Because of that failure to pay, an event of default exists on the providers' lease, QCP said. It originally delivered a notice of default to HCR ManorCare, its principal tenant, in April.
The event of default would require ManorCare to immediately pay an additional $265 million in deferred rent obligations. It also would allow QCP to terminate the provider's master lease, appoint receivers or “exercise other remedies,” the REIT said in its announcement.
That news came one day after Toledo, OH, based-HCR ManorCare announced it received a $550 million line of credit from private equity firm Centerbridge Partners. That loan will go toward repaying ManorCare's existing term loan and outstanding loans, Julie Beckert, a spokeswoman for the provider, confirmed to McKnight's.
“We remain in discussions with QCP,” Beckert added.
QCP said in its announcement that it continues to discuss the event of default, as well as related matters, with the provider. QCP also noted that it “did not assist with or participate in the negotiation or closing of” reported debt financing by ManorCare.
Last month, private equity and investment firm Carlyle Group left ManorCare following the recent departures of some of the latter's top-level executives, as well as uncertainty surrounding an investigation into the provider's therapy billing practices by the Department of Justice.