Medical Properties Trust (NYSE:MPW) shares sank as much as 6.8% in Friday morning trading as two of its largest hospital tenants -- Steward Health Care and Prospect Medical Holdings -- have hired financial advisors for debt refinancing, the Wall Street Journal reported, citing people familiar with the matter.
Steward, which completed in December 2022 the extension of a credit deal with its lenders through December 2023, was said to have brought on Guggenheim Securities to refinance asset-based loans due at the end of 2023.
Prospect Medical, meantime, tapped Houlihan Lokey for refinancing, the people told the WSJ.
The moves come as some recent financial struggles have made it difficult for the tenants to tap public markets. For context, Steward and Prospect accounted for over 27% and 10% of Medical Properties' (MPW) fourth-quarter revenues.
Given Steward's recent sale of five hospitals in Utah, MPW's exposure to rent receipts from Steward is set to fall to around 20%, the newspaper pointed out. Prospect was also said to have recently sold some of its hospitals to raise financing.
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