With a Major Tenant Issue Addressed, Is Medical Properties Trust's Ultra-High-Yielding Dividend Finally Safe?
Shares of Medical Properties Trust (NYSE: MPW) have lost nearly 60% of their value over the past year. That has pushed the healthcare real estate investment trust's (REIT's) dividend yield into the double digits. A big factor weighing on the hospital owner is the financial issues facing its two largest tenants: Steward Health Care and Prospect Medical.
Medical Properties Trust recently revealed that Prospect Medical completed new financing from third-party lenders and recapitalized its investment in that company. In addition, the REIT closed the first phase of its Australian hospital sale. Here's a look at whether those transactions will put its dividend back on solid ground.
Medical Properties announced that Prospect Medical had completed $375 million of new financing with third-party lenders to fund its hospital operations and capitalize its managed-care business for continued growth. The funding will enable Prospect to repay its $250 million asset-backed revolving credit facility in full. This will simplify the company's capital structure by freeing it of debt and lease obligations outside of what it owes Medical Properties Trust and this new third-party financing.
Source Fool.com
