Medical Properties Trust Inc.’s inventory fell 29% on Friday after the real-estate funding belief stated certainly one of its tenants, Steward Health Care System, is $50 million behind in hire funds.
Medical Properties Trust’s inventory
MPW,
closed at $3.55, down $1.45, its lowest degree since since 2009.
The inventory additionally drew at the very least one downgrade from an analyst on Friday.
The REIT stated late Thursday that it’s taking fourth-quarter noncash fees of about $350 million, together with $225 million to jot down off consolidated straight-line hire receivables, in addition to its $25 million share of straight-line hire receivables associated to the unconsolidated Massachusetts partnership and consolidated unpaid hire receivables of roughly $100 million.
“No assurances can be provided that further impairment of real-estate and non-real-estate assets will not be taken with MPT’s fourth-quarter 2023 reporting,” the REIT stated.
Medical Properties Trust is predicted to report fourth-quarter outcomes on Feb. 1.
The REIT stated it can speed up its efforts to recuperate uncollected rents and excellent mortgage obligations from Steward, which just lately knowledgeable MPT that its “liquidity has been negatively impacted by significant changes to vendors’ payment terms,” the corporate stated.
The transfer by MPT comes a few month after Steward stated it can shut down New England Sinai Acute Long-Term Care and Rehabilitation Hospital in Stoughton, Mass.
Steward cited persistent low reimbursement charges for companies paid to Medicare and Medicaid sufferers, in line with an announcement reported by Boston25 News.
“Nearly 75% of Steward hospital patients are public-pay, which chronically underpays, sometimes at rates less than the cost of delivering services,” the assertion stated.
A spokesperson for Steward didn’t reply to an e mail from MarketWatch.
MPT has employed Alvarez & Marsal Securities LLC as its monetary adviser to help with choices for recovering the hire.
MPT stated it agreed to fund a brand new $60 million bridge mortgage that’s “secured by all MPT’s existing collateral” plus new second liens on Steward’s managed-care enterprise, subordinate solely to Steward’s asset-based lenders.
Meanwhile, KeyBanc downgraded MPT to sector weight from chubby as a consequence of “uncertainty and ongoing risks” to its tenant well being that “remain an overhang.”
“Management is pursuing steps to improve its balance sheet, which we view favorably, but pricing and execution remain uncertain,” KeyBanc stated.
Visibility into the corporate’s earnings trajectory “remains low and we are moving to the sidelines until there is better clarity,” KeyBanc stated.
In the third quarter, Steward accounted for about $70.7 million, or roughly 23%, of MPT’s complete income of $306.58 million.
Prior to Friday’s strikes, MPT’s inventory had fallen 59.6% up to now yr, in contrast with a 23% rise by the S&P 500
SPX.
Dallas-based Steward Health Care describes itself as the most important physician-led, minority-owned built-in healthcare system within the U.S.
Tomi Kilgore contributed.