Omega Healthcare Prices $600M Senior Notes Offering at 5.200% Coupon Rate

Omega Healthcare Investors (OHI) has priced a $600M debt offering through the issuance of 5.200% senior notes due 2030. The 2030 notes mature on July 1, 2030, have an issue price of 99.118%, and a fixed coupon rate. The offering is expected to close on July 15, 2022.

Omega Healthcare Investors (NYSE: OHI) has priced an underwritten public offering of $600 million principal amount of 5.200% senior notes due 2030. The 2030 notes mature on July 1, 2030, have an issue price of 99.118%, and a fixed coupon rate of 5.200% paid semiannually starting January 1, 2026. The company plans to use the net proceeds from the offering for general corporate purposes, including repayment of debts, future healthcare real estate acquisitions, and paying fees and expenses related to the offering. The 2030 notes are guaranteed by OHI Healthcare Properties Limited Partnership, an Omega subsidiary. Future guarantees will come from any other Omega subsidiaries that also guarantee at least $100 million of Omega's unsecured borrowed debt. The settlement of this offering is expected to occur on June 20, 2025. Shares in the company were down 1.69% in premarket trading on Wednesday.

Omega Healthcare Investors, a real estate investment trust (REIT) that invests in the long-term healthcare industry, primarily in skilled nursing (SNFs) and assisted living facilities (ALFs), has priced a significant debt offering. The offering, which consists of senior notes with a fixed coupon rate of 5.200%, is expected to close on June 20, 2025. The proceeds from the offering will be used for various corporate purposes, including debt repayment and future healthcare real estate acquisitions.

The senior notes, due in 2030, are guaranteed by OHI Healthcare Properties Limited Partnership, an Omega subsidiary. The company has also stated that future guarantees will come from any other Omega subsidiaries that also guarantee at least $100 million of Omega's unsecured borrowed debt. This move indicates a strategic effort to diversify the sources of guarantee for the company's debt, potentially enhancing its financial flexibility and reducing reliance on a single subsidiary.

The market reaction to the announcement was mixed, with shares of Omega Healthcare Investors down by 1.69% in premarket trading on Wednesday. This reaction may reflect investor concerns about the company's debt levels or the overall market conditions affecting the healthcare sector. However, the company has maintained a strong balance sheet and a diversified portfolio of assets, which may provide some reassurance to investors.

In conclusion, Omega Healthcare Investors' $600 million debt offering is a significant financial move aimed at strengthening its balance sheet and supporting its growth plans in the healthcare real estate sector. The offering is expected to close on June 20, 2025, subject to customary closing conditions.

References:
[1] https://seekingalpha.com/news/4457107-omega-healthcare-announces-pricing-600m-debt-offering-via-issuance-of-senior-notes
[2] https://www.marketscreener.com/quote/stock/OMEGA-HEALTHCARE-INVESTOR-13890/news/Omega-Healthcare-Investors-Prices-600-Million-Debt-Offering-50211768/
[3] https://www.nasdaq.com/articles/canadian-pacific-railway-launches-c-14-bln-debt-offering
[4] https://www.gurufocus.com/news/2922669/cpkc-announces-c14-billion-debt-offering-cp-stock-news
[5] https://www.stocktitan.net/news/OHI/omega-announces-pricing-of-its-600-000-000-senior-notes-rmnmfytmvqjk.html