HCP Prices $445M Offering, Ups Share Total

LONG BEACH, CA-Healthcare properties REIT HCP has priced its new stock offering at $33 per share and has increased the number of shares offered to 13.5 million from the 12 million initially announced. HCP says that it expects to realize proceeds of approximately $445.5 million that will be used to repay borrowings under the company’s revolving line of credit. The revolving credit to be repaid includes borrowings that were applied toward the cash payment of $102 million for the June 1 acquisition of four senior housing facilities and $71 million in aggregate repayments of mortgage debt, with the remainder to be used for general corporate purposes.

The new offering comes nearly a year after HCP set the price at $24.75 per share for a public offering of 15.5 million shares of common stock to raise proceeds of approximately $384 million. That offering ultimately was upsized to a $441 million offering of 17.8 million shares, including 2.3 million shares sold to the underwriters upon exercise of their option to purchase additional shares.

That offering, too, was designed to repay debt, including borrowings from the company's credit line that were applied toward the cash payment of $165 million for HCP's purchase of a stake in first mortgage debt of HCR ManorCare. Like the new offering, last year’s $384 million offering of 15.5 million shares was upsized from the originally announced 11.5 million shares due to investor demand.

The $384-million offering was described on GlobeSt.com at the time as the latest in a series of new stock offerings by REITs, which have been raising substantial amounts of capital despite the recession and capital markets conditions that have been in turmoil. Earlier last year, HCP completed a $440-million public offering of common stock, with proceeds also used to repay debt. In the new $445.5-million offering, the book-running managers are BofA Merrill Lynch, UBS Investment Bank and Wells Fargo Securitie. The underwriters have an option to purchase up to 2.025 million shares of common stock within 30 days.