Medical Properties Trust Inc.’s stock fell 29% on Friday after the real-estate financial investment trust stated among its occupants, Steward Health Care System, is $50 million behind in lease payments.
Medical Properties Trust’s stock
MPW,
closed at $3.55, down $1.45, its most affordable level given that considering that 2009.
The stock likewise drew a minimum of one downgrade from an expert on Friday.
The REIT stated late Thursday that it’s taking fourth-quarter noncash charges of about $350 million, consisting of $225 million to cross out combined straight-line lease receivables, in addition to its $25 million share of straight-line lease receivables associated to the unconsolidated Massachusetts collaboration and combined overdue lease receivables of around $100 million.
“No guarantees can be supplied that additional problems of real-estate and non-real-estate possessions will not be taken with MPT’s fourth-quarter 2023 reporting,” the REIT stated.
Medical Properties Trust is anticipated to report fourth-quarter outcomes on Feb. 1.
The REIT stated it will accelerate its efforts to recuperate uncollected leas and impressive loan responsibilities from Steward, which just recently notified MPT that its “liquidity has actually been adversely affected by considerable modifications to suppliers’ payment terms,” the business stated.
The relocation by MPT happens a month after Steward stated it will shut down New England Sinai Acute Long-Term Care and Rehabilitation Hospital in Stoughton, Mass.
Steward mentioned persistent low repayment rates for services paid to Medicare and Medicaid clients, according to a declaration reported by Boston25 News.
“Nearly 75% of Steward medical facility clients are public-pay, which chronically underpays, often at rates less than the expense of providing services,” the declaration stated.
A representative for Steward did not react to an e-mail from MarketWatch.
MPT has actually employed Alvarez & & Marsal Securities LLC as its monetary advisor to help with choices for recuperating the lease.
MPT stated it consented to money a brand-new $60 million swing loan that is “protected by all MPT’s existing security” plus brand-new 2nd liens on Steward’s managed-care company, subordinate just to Steward’s asset-based lending institutions.
KeyBanc reduced MPT to sector weight from obese due to “unpredictability and continuous dangers” to its occupant health that “stay an overhang.”
“Management is pursuing actions to enhance its balance sheet, which we see positively, however rates and execution stay unsure,” KeyBanc stated.
Presence into the business’s revenues trajectory “stays low and we are relocating to the sidelines up until there is much better clearness,” KeyBanc stated.
In the 3rd quarter, Steward represented about $70.7 million, or approximately 23%, of MPT’s overall income of $306.58 million.
Prior to Friday’s relocations, MPT’s stock had actually fallen 59.6% in the previous year, compared to a 23% increase by the S&P 500
SPX
Dallas-based Steward Health Care explains itself as the biggest physician-led, minority-owned incorporated health care system in the U.S.
Tomi Kilgore contributed.