Medical Properties Trust Inc Q2 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Yes. Just digging into prospect a little bit more. I know that -- I guess, and it sounded like in your prepared remarks that they're not hitting your expectations too, so they're underperforming of where you thought that they should be. I mean has their results started to rebound kind of post this Omicron wave? And are they heading in the right direction now?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : And were they impacted more by Omicron than some of your other tenants, look like their coverage ratio dropped a little bit more, kind of compare them versus the other tenants between 1Q and 4Q?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And then in your remarks, too, you were kind of highlighting that they are excited about California, Pennsylvania is turning a corner. But what about Connecticut? You haven't -- you didn't mention about the viewpoint on what's going on with that portfolio?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And when does that typically occur, when do they bring you in to kind of get approval on executing that transaction?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And then is the expectation still that the Pennsylvania and the Connecticut assets will be sold?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then just last one for me. I don't know if I heard an update on the Prime purchase options. So we have a viewpoint of what's going on with those assets? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 03, 2022 / 5:00PM, MPW.N - Q2 2022 Medical Properties Trust Inc Earnings Call

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : And when do those leases officially expire?

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I hate to go back to this, but just in terms of Steward's EBITDA run rate, just so we're clear, this only happens after we get through the $200 million investment in Florida, $420 million in MAP obligations and that delay in Texas funding. But to get to that point, is that what necessitates the $150 million debt facility to Steward in the interim?

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. Understood. And then on Page 5 of the investor presentation slides. Obviously, you outlined several models of success repositioning properties over the years. And then in consideration of some of the deferrals booked over the last several quarters, are there any assets that are kind of falling into this pool right now? Or anything you're repositioning currently? And if so, what the time frame on that could look like?

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Got it. Understood. And then last one for me, just considering what happened in Utah. I mean from your perspective, what's the most attractive avenue to take here? I mean do you leave Steward in the facilities? Or do you seek a JV partner, which might be a little more difficult given the rate environment? Or is there another operator that could potentially step in to buy those operations? I'm just curious to see what the most attractive outcome to you guys would be?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : First of all, Ed, Steve and the team, thank you so much for all the additional disclosure. It's super, super helpful, and I hope that this is kind of here to stay. So thanks for that. First question is, Steward, I have a 2-parter there. The term loan, the 5-year term loan, could you tell us again exactly when that kicks in and what the interest rate audit is and any kind of kicker interest payments that you talked about. If you could just share a little bit more detail about what potential upside could come from that. And then second of all, on Steward itself, their line of credit is meant to mature. Their terms on their revolving line is meant to mature in September. And I think it's like the one thing you haven't talked about in your Steward update. If you have any update for us in regards to that particular line item?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : What causes the kicker to kick in? Is this -- they have (inaudible).

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Yes. I said, what causes the kicker to kick in? Like what are the terms that make you kind of get the kicker?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : That's helpful and good to know. And then Ed, in prior quarters with your rent coverage, you've always kind of helped us understand what the government grant in that number what kind of influence it was having on the rent coverage. Is that something you could provide this quarter as well of -- if you took that out, plus coverage dropped 30 bps or 40 bps like you kind of expressed last quarter?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Okay. That's helpful. And then just to confirm one more, direct deferrals again, $7 million year-to-date. I think you mentioned earlier on that, that all relates to Healthscope. Is that correct? Or were there any other kind of rent deferrals in that number?