Health Care REIT Inc. (NYSE: HCN) has joined the waves of companies looking to raise capital after strong share price gains. The senior living and health care properties real estate investment trust has sold 15.5 million shares of common stock at $63.75 per share, and the company has granted the underwriters an overallotment option to purchase up to an additional 2,325,000 shares. This is a substantial discount when you consider that the closing price was $66.49 and that the shares were just at $68 this past Monday.
What stands out here is that HCN will be raising gross proceeds from the offering of roughly $988 million from the face value of the sale, or about $1.1 billion if the overallotment option is exercised in full. The company’s market cap was $20.5 billion as of Thursday’s close. Another issue is that Health Care REIT’s dividend yield is now close to 5% again, since its shares have sold off.
Another boost here is that the share sale proceeds are going to the company. HCN said in the filing that it intends to use the capital raised to repay advances under its primary unsecured credit facility. It also plans to use the capital for general corporate purposes, which it specified as saying could be used to invest in health care and seniors housing properties.
Goldman Sachs, RBC Capital Markets, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, J.P. Morgan and Morgan Stanley were all listed as the joint book-running managers for the secondary offering.
Health Care REIT shares were indicated down about 3% and trading around $64.40 in the premarket. Its 52-week trading range is $52.43 to $68.36, and the consensus price target is $66.04.
READ ALSO: 5 Top Hospital Stocks to Buy Getting a Boost From the Affordable Care Act
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.