TORONTO, Nov. 8, 2013 /CNW/ - HealthLease Properties Real Estate Investment Trust (HLP.UN) ("HealthLease" or "the REIT") provides below answers to questions received since our last Q&A Update on September 27, 2013.
Question 1: Is the timing for deploying the $50mm convertible debt raise related to the properties in development?
Answer: We wanted to add more flexibility to our balance sheet. However, some of the proceeds will be used for our development properties.
Question 2: There was a tremendous growth in revenues, but the growth was not as large in earnings. What was the large added expense that dropped the profit? Is it a one-time charge or a recurring charge related to the expansion of the business?
Answer: We had tremendous growth in revenue, and fairly significant growth in earnings. We also had a very large increase in NOI. There are a number of non-cash charges in the quarter, including adjustments to Fair Market Value. We also had some minor increase in interest rates associated with minor increases in leverage. Notably, there was a meaningful increase in FFO, and thus greater intrinsic value on a per unit basis.
Question 3: The subsequent disposition of the Valpairiso, IN, property-was it a gain on the books or a loss?
Answer: The Valparaiso property was sold at carrying cost.
Question 4: Are there plans for lowering the line of credit? Given that it is almost fully drawn, what are the long term financing options?
Answer: We recently announced a $50M convertible offering which will close November 12. We will use part of the proceeds to pay down the line of credit.
Question 5: Do you have any currency exposure to flows in vs. flows out (US$ income, C$ debt and equity)? Do you hedge for FX?
Answer: We do have hedges in place for all US income flowing back to Canada.
Supplemental Financial Information
This news release is not in any way a substitute for reading HealthLease's financial statements, including notes to the financial statements, and Management's Discussion and Analysis, dated November 7, 2013. The REIT's 2013 Fiscal Third Quarter Financial Statements, and MD&A, have been filed on SEDAR. The Third Quarter Financial Statements and MD&A can also be viewed in the Investor Information section of the HealthLease's website at www.hlpreit.com.
About HealthLease Properties Real Estate Investment Trust
HealthLease Properties Real Estate Investment Trust (TSX: HLP.UN) owns one of the youngest and highest quality portfolios of seniors housing and care facilities with 12 properties located in two provinces of Canada and 32 properties located in seven states of the United States for a total of 4,335 beds. The facilities are leased to experienced tenant operators who have significant operational experience in the U.S. and Canada. The leases are structured as long-term and triple-net: features that provide stability and dependability to the REIT's cash flow and distributions. The REIT's best-in-class portfolio of premier properties meets the growing demands of modern seniors by emphasizing features such as hotel-like design, private rooms and baths and hospitality-inspired amenities. For more information, visit www.hlpreit.com.
This news release contains forward-looking statements which reflect the REIT's current expectations regarding future events. The forward-looking statements involve risks and uncertainties, including those set forth in the REIT's Annual Information Form dated March 6, 2013 under the section "Risk Factors," a copy of which can be obtained at www.sedar.com. Actual results could differ materially from those projected herein. The REIT disclaims any obligation to update these forward-looking statements.
SOURCE: HealthLease Properties Real Estate Investment Trust
For further information:
Executive Vice President - Finance
HealthLease Properties REIT
(416) 815-0700 ext. 258