Skilled Healthcare announces funding of first loans insured by U.S. Department of HUD

Skilled Healthcare Group, Inc. (NYSE: SKH) today announced the funding of its first loans insured by the U.S. Department of Housing and Urban Development (HUD).  The loans have a combined principal balance of $21.6 million and are secured by three skilled nursing facilities. The HUD insured loans have an all in interest rate of approximately 4.6% and amortization terms of 30 to 35 years. The net loan proceeds of $20.4 million will be used to pay down outstanding term debt in the Company's senior secured credit faciity, which has a maturity date of April 2016 and an all in interest rate of approximately 6.8%. Loans from current loan commitments that would be secured by an additional seven facilities in the amount of $66.0 million with an all in interest rate of approximately 5.7% are expected to close before the end of the year. "We are pleased to have finally closed our initial loans under the HUD program. These loans strengthen our capital structure and also improve our leverage ratio, which is a metric under our senior secured credit facility comparing earnings to debt that we must maintain below an agreed level," said Boyd Hendrickson, Chairman and Chief Executive Officer of Skilled Healthcare Group. "HUD also recently informed us that they will require an update of our corporate credit review from 2012 before issuing further commitments.  We hope to initiate that update by the fourth quarter of 2013 or early 2014, and look forward to pursuing additional HUD-insured loans as quickly as possible. The required update will not affect any of our current loan commitments from HUD," continued Mr. Hendrickson.