HCP Boosts Cash Raise (HCP)

HCP, Inc. (NYSE: HCP) is raising more cash than expected.  The company has priced a secondary offering of 15.5 million shares of common stock at a price per share of $24.75, above the 11.5 million shares originally indicated in the offering.  The release says the increased size was due to investor demand.

Funds received from the offering are approximately $384 million and will be used to repay all borrowings under HCP’s revolving credit facility.  This includes debt applied to the cash payment of $165 million for the participation in first mortgage debt of HCR ManorCare.  The remainder of the funds will be used for general corporate purposes.

BofA Merrill Lynch will act as book-running manager for the offering.  The underwriters also have an over-allotment option to purchase up to 2,325,000 shares of common stock within 30 days.

Before the effects of this offering, the market cap of HCP was listed as $6.7 billion.  Shares closed at $26.44 yesterday and that was down from $25.78 the day before (although yesterday was the dividend date of $0.46) on the same day as earnings.

So far, we have shares down 6% at $24.82 right before the open.  Its 52-week trading range is $14.26 to $42.16.  Average daily volume is roughly 5.1 million shares.

JON C. OGG
AUGUST 5, 2009