Brookdale Senior Living, an operator of senior living communities, completed two financing transactions that refinanced all of its remaining 2024 debt maturities. After giving effect to these transactions, the company’s next debt maturity without extension options is September 2025.
The first financing transaction, completed earlier this month, was an amendment to Brookdale Senior Living’s revolving credit agreement with Capital One as administrative agent and lender. The amended agreement provides an expanded commitment of up to $100 million which can be drawn in cash or as letters of credit and represents a $20 million increase from the previously existing commitment.
Available capacity under the facility will vary from time to time based upon certain calculations related to the appraised value and performance of the communities securing the credit facility and the variable interest rate of the credit facility. The amended credit facility matures in January 2027, and Brookdale Senior Living has options to extend the facility to March 2028 and March 2029, subject to the satisfaction of certain conditions. Amounts drawn under the facility bear interest at SOFR plus an applicable margin. The applicable margin varies based on the percentage of the total commitment drawn, with a 2.5% margin at utilization equal to or lower than 50% and a 3% margin at utilization greater than 50%.
The second financing transaction consists of a $180 million loan under Brookdale Senior Living’s master credit facility agreement, dated as of Aug. 31, 2017. The financing with Jones Lang LaSalle Multifamily was obtained pursuant to Fannie Mae’s DUS Program. The principal amount of the new debt is secured by non-recourse first mortgages on 47 communities, which also continue to secure approximately $580 million of additional outstanding mortgages with a later maturity. The $180 million loan bears interest at a fixed rate of 5.97% and matures in 2031. The facility includes certain “borrow-up” provisions, which Brookdale Senior Living expects will enable it to obtain additional funding in 2024 under the loan based on the performance of the underlying communities. At the closing, the company repaid $260 million of debt under the facility, which was scheduled to mature in 2024, using proceeds from the $180 million loan and cash on hand.
The company also made progress on a financing transaction involving 11 of its currently unencumbered owned communities, which it expects to complete in the coming months.
Additionally, the company sold its remaining 20% equity interest in its Health Care Services unconsolidated venture and received aggregate proceeds of approximately $27 million in connection with the transaction. The company previously decreased this investment upon a sale of a portion of the venture in November 2021.
“We believe the positive strides we have made in 2023 are reflected in these completed financing transactions, which clear our debt maturities until 2025. The ongoing proactive management of our liquidity position, including these completed and pending transactions, together with Brookdale’s solid improvement in operating results, support our continued strong liquidity position,” Dawn Kussow, executive vice president and CFO of Brookdale Senior Living, said. “We appreciate Fannie Mae and JLL for their ongoing partnership on this financing and Capital One for their partnership on the amended credit agreement.”
