Bulletin: Omega Healthcare Investors' Proposed Acquisition Of MedEquities Realty Trust Would Have Minimal Impact On Leverage

NEW YORK (S&P Global Ratings) Jan. 2, 2019----S&P Global Ratings said today that Omega Healthcare Investors Inc.'s (BBB-/Stable/--) proposed acquisition of MedEquities Realty Trust (not rated) for approximately $600 million would have a limited impact on debt leverage, and only modestly improves Omega's portfolio diversification. MedEquities' shareholders will receive a fixed exchange ratio of 0.235 Omega common shares plus $2.00 in cash for each MedEquities share held. We expect the transaction to close in the second quarter of 2019. We think the acquisition improves Omega's tenant diversification and facility type diversification modestly, with the addition of nine new operators and greater exposure to non-skilled nursing facilities (SNFs). Only 30% of MedEquities' annualized rental income as of Sept. 30, 2018, was

...NEW YORK (S&P Global Ratings) Jan. 2, 2019----S&P Global Ratings said today that Omega Healthcare Investors Inc.'s (###-/Stable/--) proposed acquisition of MedEquities Realty Trust (not rated) for approximately $600 million would have a limited impact on debt leverage, and only modestly improves Omega's portfolio diversification. MedEquities' shareholders will receive a fixed exchange ratio of 0.235 Omega common shares plus $2.00 in cash for each MedEquities share held. We expect the transaction to close in the second quarter of 2019. We think the acquisition improves Omega's tenant diversification and facility type diversification modestly, with the addition of nine new operators and greater exposure to non-skilled nursing facilities (SNFs). Only 30% of MedEquities' annualized rental income as of Sept. 30, 2018, was from skilled nursing facilities, with the majority coming from acute care hospitals and long-term acute care hospitals. However, we note that EBITDAR coverage on MedEquities'...

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