Ventas Invests in Colony Capital Refinancing

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CHICAGO--(BUSINESS WIRE)-- Ventas (NYSE: VTR) announced that it has provided $490 million in financing to subsidiaries of Colony Capital, Inc. (NYSE: CLNY) (collectively, the parent and its subsidiaries, “Colony”) as part of a $1.515 billion successful refinancing (the “New Secured Loan”) of Colony’s prior $1.725 billion consolidated healthcare loan (the “Refinanced Loan”) maturing in December 2019, which has been repaid and discharged in full.

Ventas’s tranche of the New Secured Loan, which totals $490 million, bears interest at LIBOR plus 6.42 percent, representing a current all-in GAAP rate of 9 percent. The entire $1.515 billion loan has a five-year term (inclusive of three one-year extension options), bears interest at a floating rate that currently blends to one-month LIBOR plus 3.33 percent, and provides strong debt service coverage. The New Secured Loan has a 75 percent loan to value and is supported by a diverse pool of collateral, including 158 U.S. healthcare properties comprised of medical office buildings, senior housing properties and other healthcare assets.

“We are delighted to support Colony’s successful refinancing, which creates value for both companies. For Ventas, our investment provides accretion and excellent risk adjusted returns and, for Colony, the transaction represents an important milestone, enhancing its financial position with respect to its healthcare portfolio,” said Ventas Chairman and Chief Executive Officer Debra A. Cafaro. “As we pivot to growth, our outstanding team is accelerating our investments across our verticals, which combine to deliver accretion and reliable cash flow growth. With our recently announced investment with Le Groupe Maurice, continued progress on our Research & Innovation developments and now the Colony Capital investment, we have announced over $2.5 billion of investments year to date.”

Ventas previously held $270 million of the Refinanced Loan, which bore interest at 8.25 percent. Colony Capital used the proceeds of the New Secured Loan, newly contributed equity capital and asset sale proceeds to repay the Refinanced Loan in full.

Ventas expects the investment to be accretive to normalized funds from operations by five cents per share on an annualized and leverage neutral basis. Pro forma for the transaction, loans represent a modest 4 percent of Ventas’s net operating income.

About Ventas

Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of approximately 1,200 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, university-based research and innovation centers, inpatient rehabilitation and long-term acute care facilities, and health systems. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. References to âVentasâ or the âCompanyâ mean Ventas, Inc. and its consolidated subsidiaries unless otherwise expressly noted. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.

The Company routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission (âSECâ) filings, public conference calls, webcasts and the Companyâs website at www.ventasreit.com/investor-relations. The information that the Company posts to its website may be deemed to be material. Accordingly, the Company encourages investors and others interested in the Company to routinely monitor and review the information that the Company posts on its website, in addition to following the Companyâs press releases, SEC filings and public conference calls and webcasts. Supplemental information regarding the Company can be found on the Companyâs website under the âInvestor Relationsâ section or at www.ventasreit.com/investor-relations/annual-reports---supplemental-information. A comprehensive listing of the Companyâs properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Companyâs or its tenantsâ, operatorsâ, borrowersâ or managersâ expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger or acquisition integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust (âREITâ), plans and objectives of management for future operations and statements that include words such as âanticipate,â âif,â âbelieve,â âplan,â âestimate,â âexpect,â âintend,â âmay,â âcould,â âshould,â âwillâ and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from the Companyâs expectations. The Company does not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

The Companyâs actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Companyâs filings with the SEC. These factors include without limitation: (a) the ability and willingness of the Companyâs tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their respective contractual arrangements with the Company, including, in some cases, their obligations to indemnify, defend and hold harmless the Company from and against various claims, litigation and liabilities; (b) the ability of the Companyâs tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness; (c) the Companyâs success in implementing its business strategy and the Companyâs ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (d) the accuracy of estimates and assumptions that the Company used to underwrite its acquisition of the interests in the joint venture with Le Group Maurice and to determine the projected impact and benefits (including financial) of the transaction, and the potential for the Companyâs estimates or assumptions, as well as the expected impact and benefits, to change as additional information becomes available; (e) macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations, and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; (f) the nature and extent of future competition, including new construction in the markets in which the Companyâs seniors housing communities and office buildings are located; (g) the extent and effect of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (h) increases in the Companyâs borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of the London Inter-bank Offered Rate after 2021; (i) the ability of the Companyâs tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the Companyâs properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; (j) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and the effect of those changes on the Companyâs revenues, earnings and funding sources; (k) the Companyâs ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (l) the Companyâs ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (m) final determination of the Companyâs taxable net income for the year ended December 31, 2018 and for the year ending December 31, 2019; (n) the ability and willingness of the Companyâs tenants to renew their leases with the Company upon expiration of the leases, the Companyâs ability to reposition its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant; (o) risks associated with the Companyâs senior living operating portfolio, such as factors that can cause volatility in the Companyâs operating income and earnings generated by those properties, including without limitation national and regional economic conditions, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties; (p) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (q) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Companyâs leases and the Companyâs earnings; (r) the Companyâs ability and the ability of its tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers; (s) the impact of damage to the Companyâs properties from catastrophic weather and other natural events and the physical effects of climate change; (t) the impact of increased operating costs and uninsured professional liability claims on the Companyâs liquidity, financial condition and results of operations or that of the Companyâs tenants, operators, borrowers and managers, and the ability of the Company and the Companyâs tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims; (u) risks associated with the Companyâs office building portfolio and operations, including the Companyâs ability to successfully design, develop and manage office buildings and to retain key personnel; (v) the ability of the hospitals on or near whose campuses the Companyâs medical office buildings are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (w) risks associated with the Companyâs investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partnersâ financial condition; (x) the Companyâs ability to obtain the financial results expected from its development and redevelopment projects; (y) the impact of market or issuer events on the liquidity or value of the Companyâs investments in marketable securities; (z) consolidation activity in the seniors housing and healthcare industries resulting in a change of control of, or a competitorâs investment in, one or more of the Companyâs tenants, operators, borrowers or managers or significant changes in the senior management of the Companyâs tenants, operators, borrowers or managers; (aa) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (bb) changes in accounting principles, or their application or interpretation, and the Companyâs ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Companyâs earnings.