US property group set to finalise debt deal for UK hospitals

Uk property investors

The $800 million refinancing will be among the biggest such deals in the UK healthcare sector in recent months

An American property group is close to finalising a £650 million deal to refinance debt secured against dozens of British hospitals.

According to Sky News, Medical Properties Trust, which is listed in New York, is close to announcing an agreement with a group of financial institutions.

City sources said on Thursday that the deal would encompass 27 hospitals across the UK, all of which are operated by Circle Health on long-term leases.

The $800 million refinancing will be among the biggest such deals in the UK healthcare sector in recent months.

Insiders said it was being led by Song Capital, a UK and European investment company, with support from Aviva, Canada Life and Phoenix Group.

Medical Properties Trust (MPT) is one of the world’s biggest owners of healthcare real estate with over 430 properties valued at more than $17 billion.

Circle Health’s operating business was acquired by Abu Dhabi-backed PureHealth for $1.2 billion in a deal which completed earlier this year.

One source said the financing had been oversubscribed among Song Capital’s investors.

Song was established by Dan MacKinnon and Tom Pritchard in 2021, and has accumulated interests across the healthcare and leisure sectors.

In 2022, it provided the UK’s biggest healthcare charity, Nuffield Health, with around £250 million of real estate financing secured against 10 hospitals.

Medical Properties Trust’s stock market valuation has slumped in recent times and is down by around 40% over the last year alone.

It now has a market cap of just below $3 billion.

Rothschild is understood to be advising Song Capital on the deal.

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