MedEquities Realty Trust closes initial private placement of $163.9 million common stock

MedEquities Realty Trust, Inc., a newly formed, self-managed and self-administered company that invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments, announced today that during July and August 2014 it completed an initial private placement of $163.9 million of its common stock. Net proceeds to MedEquities, after purchase/placement agent discounts and fees and certain offering expenses, were approximately $151.6 million.

Additionally, the Company announced that on August 1^st it closed on five acquisition and loan transactions totaling $119.0 million with Vibra Healthcare and Fundamental Healthcare.

The investments with Vibra Healthcare, an operator of over 50 freestanding facilities in 18 states, consist of:

• the purchase and leaseback of a 60-bed long-term acute care hospital in Kentfield, California for $51 million. The lease term is for 15 years with renewal options at an annual rate of 8.75% plus annual fixed escalators;
• a five-year $10 million interest-only loan secured by a first mortgage on the Vibra Hospital of Western Massachusetts located in Springfield, Massachusetts at an interest rate of 9.0%; and
• a five-year $18 million interest-only loan secured by a first mortgage on the Vibra Rehabilitation Hospital of Amarillo in Amarillo, Texas at an interest rate of 9.0% with an option after one year to purchase the property for up to $30 million.

The investments with Fundamental Healthcare, an operator of 78 facilities in nine states, consist of:

• the purchase and leaseback of a 39-bed long-term acute care hospital in Henderson, Nevada for $20 million. The lease term is for 15 years with renewal options at an annual rate of 8.55% plus annual fixed escalators; and
• the purchase and leaseback of an 88-bed (currently under expansion to 120-bed) skilled nursing facility in Spartanburg, South Carolina for $20 million. The lease term is for 12 years with renewal options at an annual rate of 9.0% plus annual fixed escalators.

Commenting on the announcement, John McRoberts, Chairman and Chief Executive Officer of MedEquities, said, "With the long-term relationships we have established in the healthcare industry, we have been able to quickly source and fund attractive new growth opportunities with strong operators such as Vibra Healthcare and Fundamental Healthcare. We look forward to working with these and other healthcare services companies to help meet their growing capital needs."

The shares of common stock issued in the private placement have not been registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the common stock.