Q3 2026 Medical Properties Trust Inc Earnings Call
Operator: Hello everyone. Thank you for joining us and welcome to the Medical Properties Trust third quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise during this call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference call over to Charles Lambert, Senior Vice President. Charles, please go ahead.
Operator: Hello everyone. Thank you for joining us and welcome to the Medical Properties Trust third quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise during this call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference call over to Charles Lambert, Senior Vice President. Charles, please go ahead.
Speaker #1: today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again.
Speaker #1: I will now hand the conference call over to Charles Lambert, Senior Vice President. Charles, please go ahead.
Charles Lambert: Good morning. Welcome to the MPT conference call to discuss our third quarter 2026 financial results. With me today are Edward K. Aldag Jr., Chairman, President, and Chief Executive Officer of the company, Steven Hamner, Executive Vice President and Chief Financial Officer, Kevin Hanna, Senior Vice President, Controller, and Chief Accounting Officer, Rosa Williams, Senior Vice President of Operations and Secretary, and Jason Fry, Managing Director of Asset Management and Underwriting. Our press release was distributed this morning and furnished on Form 8-K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at mpt.com in the investor relations section. Additionally, we are hosting a live webcast of today's call, which you can access in that same section.
Charles Lambert: Good morning. Welcome to the MPT conference call to discuss our third quarter 2026 financial results. With me today are Edward K. Aldag Jr., Chairman, President, and Chief Executive Officer of the company, Steven Hamner, Executive Vice President and Chief Financial Officer, Kevin Hanna, Senior Vice President, Controller, and Chief Accounting Officer, Rosa Williams, Senior Vice President of Operations and Secretary, and Jason Fry, Managing Director of Asset Management and Underwriting. Our press release was distributed this morning and furnished on Form 8-K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at mpt.com in the investor relations section. Additionally, we are hosting a live webcast of today's call, which you can access in that same section.
Speaker #2: Good morning. Welcome to the MPT conference call to discuss our third quarter 2026 financial results. With me today are Edward K. Aldag, Jr., Chairman, President, and Chief Executive Officer of the company, Stephen Hamner, Executive Vice President and Chief Financial Officer, Kevin Hanna, Senior Vice President, Controller, and Chief Accounting Officer, Rosa Williams, Senior Vice President of Operations and Secretary, and Jason Fry, Managing Director, Asset Management and Underwriting.
Speaker #2: Our press release was distributed this morning and furnished on Form 8K with the securities and exchange commission. If you did not receive a copy, it is available on our website at mpt.com in the Investor Relations section.
Speaker #2: Additionally, we're hosting a live webcast of today's call, which you can access in that same section. During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Charles Lambert: During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause our financial results and future events to differ materially from those expressed and/or underlying such forward-looking statements. We refer you to the company's reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company's actual results or future events to differ materially from those expressed in this call. The information being provided today is as of this date only, and except as required by the federal securities laws, the company does not undertake a duty to update any such information.
Charles Lambert: During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause our financial results and future events to differ materially from those expressed and/or underlying such forward-looking statements. We refer you to the company's reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company's actual results or future events to differ materially from those expressed in this call. The information being provided today is as of this date only, and except as required by the federal securities laws, the company does not undertake a duty to update any such information.
Speaker #2: These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such forward-looking statements.
Speaker #2: We refer you to the company's reports filed with the securities and exchange commission for discussion of the factors that could cause the company's actual results or future events to differ materially from those expressed in this call.
Speaker #2: The information being provided today is as of this date only and accept as required by the Federal Securities Laws the company does not undertake a duty to update any such information.
Charles Lambert: In addition, during the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to, and not in lieu of, comparable GAAP financial measures. Please note that in our press release, MPT has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at mpt.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag.
Charles Lambert: In addition, during the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to, and not in lieu of, comparable GAAP financial measures. Please note that in our press release, MPT has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at mpt.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag.
Speaker #2: In addition, during the course of the conference call, we will describe certain non-GAAP financial measures which should be considered in addition to and not in lieu of comparable GAAP financial measures.
Speaker #2: Please note that in our press release, MPT is reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements.
Speaker #2: You can also refer to our website at mpt.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag.
Ed Aldag: Thank you, Charles, and thank all of you for joining us this morning. Earlier this year, we projected MPT would reach annualized cash rental revenue of at least $1 billion by the end of this year. Year to date, we have already collected more than $750 million of cash revenue, which annualizes to more than the $1 billion we projected earlier. This reflects the strength of our diverse portfolio of operators around the world. During the year, we have sold 9 properties for cash proceeds of approximately $600 million, and we still hit our target. For 2027, despite these sales, we continue to expect portfolio cash rents above $1 billion. Now I would like to address some recent changes at HSA. Many of you are aware that the 2 principals leading HSA have been engaged in a legal dispute that has served as an unfortunate distraction from core hospital operations.
Edward K. Aldag Jr.: Thank you, Charles, and thank all of you for joining us this morning. Earlier this year, we projected MPT would reach annualized cash rental revenue of at least $1 billion by the end of this year. Year to date, we have already collected more than $750 million of cash revenue, which annualizes to more than the $1 billion we projected earlier. This reflects the strength of our diverse portfolio of operators around the world. During the year, we have sold nine properties for cash proceeds of approximately $600 million, and we still hit our target. For 2027, despite these sales, we continue to expect portfolio cash rents above $1 billion. Now I would like to address some recent changes at HSA. Many of you are aware that the two principals leading HSA have been engaged in a legal dispute that has served as an unfortunate distraction from core hospital operations.
Speaker #3: Thank you, Charles. And thank all of you for joining us this morning. Earlier this year, we projected MPT would reach annualized cash rental revenue of at least $1 billion by the end of this year.
Speaker #3: Year-to-date, we have already collected more than $750 million of cash revenue which annualizes to more than the $1 billion we projected earlier. This reflects the strength of our diverse portfolio of operators around the world.
Speaker #3: During the year, we've sold 9 properties for cash proceeds of approximately $600 million, and we still hit our target. For 2027, despite these sales, we continue to expect portfolio cash rents above $1 billion.
Speaker #3: Now I'd like to address some recent changes at HSA. Many of you are aware that the two principals leading HSA have been engaged in a legal dispute that has served as an unfortunate distraction from core hospital operations.
Ed Aldag: With the resolution of this matter and the exit of one of those principals, we now have a new tenant in place that goes by the name of Ardonis. At this time, the hospital is going to continue to operate under the HSA name. As we have discussed in the past few quarters, HSA's core challenges remain revenue cycle management. Simply put, these hospitals have not done a good enough job of billing and collecting. To address these continued challenges, HSA has engaged Ovation Healthcare, based in Nashville, Tennessee, to provide management services. Ovation manages over 500 hospitals across the US and will immediately take over all aspects of operations across the portfolio, including revenue cycle, IT, staffing, supply chain, and other areas. Ovation's immediate focus will be on improving RCM. We are optimistic that Ovation can help HSA to unlock the significant potential of these hospitals.
Edward K. Aldag Jr.: With the resolution of this matter and the exit of one of those principals, we now have a new tenant in place that goes by the name of Ardonis. At this time, the hospital is going to continue to operate under the HSA name. As we have discussed in the past few quarters, HSA's core challenges remain revenue cycle management. Simply put, these hospitals have not done a good enough job of billing and collecting. To address these continued challenges, HSA has engaged Ovation Healthcare, based in Nashville, Tennessee, to provide management services. Ovation manages over 500 hospitals across the US and will immediately take over all aspects of operations across the portfolio, including revenue cycle, IT, staffing, supply chain, and other areas. Ovation's immediate focus will be on improving RCM. We are optimistic that Ovation can help HSA to unlock the significant potential of these hospitals.
Speaker #3: With the resolution of this matter and the exit of one of those principals, we now have a new tenant in place that goes by the name of Ardanis.
Speaker #3: At this time, the hospitals will continue to operate under the HSA name. As we have discussed in the past few quarters, HSA's core challenges remain revenue cycle management, simply put, these hospitals have not done a good enough job of billing and collecting.
Speaker #3: To address these continued challenges, HSA has engaged Ovation Healthcare based in Nashville, Tennessee, to provide management services. Ovation manages over 500 hospitals across the U.S.
Speaker #3: and will immediately take over all aspects of operations across the portfolio including revenue cycle, IT, staffing, supply chain, and other areas. Ovation's immediate focus will be on improving RCM.
Speaker #3: We are optimistic that Ovation can help HSA to unlock the significant potential of these hospitals. Turning to the U.K., where we have been discussing budget constraints that have adversely impacted the NHS for several quarters now, as a result of these challenges, the NHS has not been able to fully fund the robust demand the country continues to see for behavioral health services.
Ed Aldag: Turning to the UK, where we have been discussing budget constraints that have adversely impacted the NHS for several quarters now.
Edward K. Aldag Jr.: Turning to the UK, where we have been discussing budget constraints that have adversely impacted the NHS for several quarters now.
Ed Aldag: As a result of these challenges, the NHS has not been able to fully fund the robust demand the country continues to see for behavioral health services. Recognizing these ongoing dynamics, MPT and Priory have reached an agreement to reduce the annual rental obligations by approximately 18%, with the ability for rent to increase as patient volumes recover. As part of this agreement, we added an extension option at MPT's election that effectively extends Priory's lease by 10 years. Following our recent asset sale at attractive valuations and the comprehensive steps we have taken to refinance our debt, as Steve will discuss in more detail shortly, we have meaningfully strengthened our balance sheet this year. Additionally, as Rosa will cover, our portfolio consists of more than 50 operators around the world that are well-positioned to continue servicing increased global demand for healthcare services.
Edward K. Aldag Jr.: As a result of these challenges, the NHS has not been able to fully fund the robust demand the country continues to see for behavioral health services. Recognizing these ongoing dynamics, MPT and Priory have reached an agreement to reduce the annual rental obligations by approximately 18%, with the ability for rent to increase as patient volumes recover. As part of this agreement, we added an extension option at MPT's election that effectively extends Priory's lease by 10 years. Following our recent asset sale at attractive valuations and the comprehensive steps we have taken to refinance our debt, as Steve will discuss in more detail shortly, we have meaningfully strengthened our balance sheet this year. Additionally, as Rosa will cover, our portfolio consists of more than 50 operators around the world that are well-positioned to continue servicing increased global demand for healthcare services.
Speaker #3: Recognizing these ongoing dynamics, MPT and Priory have reached an agreement to reduce the annual rental obligations by approximately 18% with the ability for rents to increase as patient volumes recover.
Speaker #3: As part of this agreement, we added an extension option at MPT's election that effectively extends Priory's lease by 10 years. Following our recent asset sales at attractive valuations and the comprehensive steps we have taken to refinance our debt that Steve will discuss in more detail shortly, we have meaningfully strengthened our balance sheet this year.
Speaker #3: Additionally, as Rosa will cover, our portfolio consists of more than 50 operators around the world that are well-positioned to continue servicing increased global demand for healthcare services.
Ed Aldag: As such, we remain confident that our business model is as important today as it has ever been, and we are well-positioned to achieve our financial objectives and to create enduring value for our shareholders. Rosa?
Edward K. Aldag Jr.: As such, we remain confident that our business model is as important today as it has ever been, and we are well-positioned to achieve our financial objectives and to create enduring value for our shareholders. Rosa?
Speaker #3: As such, we remain confident that our business model is as important today as it has ever been. And we are well-positioned to achieve our financial objectives and to create enduring value for our shareholders.
Speaker #3: Rosa?
Rosa Williams: Thank you, Ed. Across the portfolio, post-acute care remains a notable source of momentum. General acute performance is broadly stable, and operators in behavioral health are taking targeted steps to improve staffing, service mix, and referral alignment. Across Europe, operators are benefiting from strong performance trends. Median delivered another quarter of solid performance driven by strong occupancy, particularly in orthopedics, psychosomatics, and addiction treatment, combined with prudent cost management. Circle Health continues its strong performance, delivering increased revenue, consistent volumes, and robust margins. Following the successful Infracore IPO in July, Swiss Medical Network reported increasing hospital revenue year over year and coverage surpassing 2 times, driven by its growing integrated care networks and cost containment initiatives.
Rosa Williams: Thank you, Ed. Across the portfolio, post-acute care remains a notable source of momentum. General acute performance is broadly stable, and operators in behavioral health are taking targeted steps to improve staffing, service mix, and referral alignment. Across Europe, operators are benefiting from strong performance trends. Median delivered another quarter of solid performance driven by strong occupancy, particularly in orthopedics, psychosomatics, and addiction treatment, combined with prudent cost management. Circle Health continues its strong performance, delivering increased revenue, consistent volumes, and robust margins. Following the successful Infracore IPO in July, Swiss Medical Network reported increasing hospital revenue year over year and coverage surpassing 2x, driven by its growing integrated care networks and cost containment initiatives.
Speaker #4: Thank you, Ed. Across the portfolio, post-acute care remains a notable source of momentum, general acute performance is broadly stable, and operators in behavioral health are taking targeted steps to improve staffing, service mix, and referral alignment.
Speaker #4: Across Europe, operators are benefiting from strong performance trends. Median delivered another quarter of solid performance driven by strong occupancy particularly in orthopedics, psychosomatics, and addiction treatment combined with prudent cost management.
Speaker #4: Circle Health continues its strong performance delivering increased revenue consistent volumes and robust margins. Following the successful InfraCore IPO in July, Swiss Medical Network reported increasing hospital revenue year over year and coverage surpassing two times driven by its growing integrated care networks and cost containment initiatives.
Rosa Williams: Finally, in Spain, IMED is generating notable volume growth, with surgeries increasing more than 11% year-over-year, led by a nearly 40% increase at IMED Colón in Valencia, which is reaching stabilization in its third year of operations. The opening of the new hospitals in Alicante and Barcelona in the coming months will further expand IMED's capacity in attractive Spanish markets. In the US, Ernest Health remains a standout post-acute operator, maintaining a consistent coverage of 2.5 times. Noor continues to produce strong earnings, with volumes up year-over-year and coverage of 2.4 times on full contractual rent. Noor is currently paying 50% of contractual rent as scheduled and with all payments current and will begin paying 100% contractual rent in December. In summary, we see meaningful momentum across several of our largest investments, along with practical operating plans where improvement is needed.
Rosa Williams: Finally, in Spain, IMED is generating notable volume growth, with surgeries increasing more than 11% year-over-year, led by a nearly 40% increase at IMED Colón in Valencia, which is reaching stabilization in its third year of operations. The opening of the new hospitals in Alicante and Barcelona in the coming months will further expand IMED's capacity in attractive Spanish markets. In the US, Ernest Health remains a standout post-acute operator, maintaining a consistent coverage of 2.5x. Noor continues to produce strong earnings, with volumes up year-over-year and coverage of 2.4x on full contractual rent. Noor is currently paying 50% of contractual rent as scheduled and with all payments current and will begin paying 100% contractual rent in December. In summary, we see meaningful momentum across several of our largest investments, along with practical operating plans where improvement is needed.
Speaker #4: Finally, in Spain, IMED is generating notable volume growth with surgeries increasing more than 11% year over year led by nearly 40% increase at IMED Cologne and Valencia which is reaching stabilization in its third year of operations.
Speaker #4: The opening of the new hospitals in Alacanté and Barcelona in the coming months will further expand IMED's capacity and attractive Spanish markets. In the U.S., earnest health remains a standout post-acute operator maintaining a consistent coverage of 2.5 times.
Speaker #4: NOR continues to produce strong earnings with volumes up year over year and coverage of 2.4 times on full contractual rent. NOR is currently paying 50% of contractual rent as scheduled and with all payments current and will begin paying $100% contractual rent in December.
Speaker #4: In summary, we see meaningful momentum across several of our largest investments along with practical operating plans where improvement is needed. The strength of our portfolio's diversity is as evident as it has ever been.
Rosa Williams: The strength of our portfolio's diversity is as evident as it has ever been. Post-acute care remains a clear portfolio differentiator, supported by improving coverage and favorable demand. We are also encouraged by early signs of stabilization in behavioral health, while our general acute portfolio generates solid coverage. Together, these trends demonstrate the value of our diversified portfolio. Kevin?
Rosa Williams: The strength of our portfolio's diversity is as evident as it has ever been. Post-acute care remains a clear portfolio differentiator, supported by improving coverage and favorable demand. We are also encouraged by early signs of stabilization in behavioral health, while our general acute portfolio generates solid coverage. Together, these trends demonstrate the value of our diversified portfolio. Kevin?
Speaker #4: Post-acute care remains a clear portfolio differentiator supported by improving coverage and favorable demand. We are also encouraged by early signs of stabilization in behavioral health while our general acute portfolio generates solid coverage.
Speaker #4: Together, these trends demonstrate the value of our diversified portfolio. Kevin?
Kevin Hanna: Thank you, Rosa. Today, we reported normalized FFO of $0.11 per share for Q3 2026, which was in line with our expectations, except for the non-payment of September rent from HSA. The $2.4 billion secure debt refinancing transaction that was completed in August includes extinguishment of existing unsecured notes at par and, in other instances, extinguishment of debt below par, capturing an approximate $123 million of net discount. We recognized $70 million on this discount as a gain in the quarter, with the remainder to be recognized through interest expense over the term of the notes. Also in the quarter, we agreed to a rent modification of approximately GBP 11 million annually to Priory. We have incorporated a variable rent component to recapture some or all of that rent if Priory were to reach certain revenue hurdles.
Kevin Hanna: Thank you, Rosa. Today, we reported normalized FFO of $0.11 per share for Q3 2026, which was in line with our expectations, except for the non-payment of September rent from HSA. The $2.4 billion secure debt refinancing transaction that was completed in August includes extinguishment of existing unsecured notes at par and, in other instances, extinguishment of debt below par, capturing an approximate $123 million of net discount. We recognized $70 million on this discount as a gain in the quarter, with the remainder to be recognized through interest expense over the term of the notes. Also in the quarter, we agreed to a rent modification of approximately GBP 11 million annually to Priory. We have incorporated a variable rent component to recapture some or all of that rent if Priory were to reach certain revenue hurdles.
Speaker #2: Thank you, Rosa. Today, we reported normalized SFO of $0.11 per share for the third quarter of 2026 which was in line with our expectations except for the nonpayment of September rent from HSA.
Speaker #2: The 2.4 billion secured debt refinancing transaction that was completed in August includes extinguishments of existing unsecured notes at par and in other instances extinguishments of debt below par.
Speaker #2: Capturing an approximate $123 million of net discount. We recognize $70 million this discount as a gain in the quarter with the remainder to be recognized through interest expense over the term of the notes.
Speaker #2: Also in the quarter, we agreed to a rent modification of approximately $11 million annually to Priory we have incorporated a variable rent component to recapture some or all of that rent if Priory were to reach certain revenue hurdles.
Kevin Hanna: We have also effectively extended the lease term by an additional 10 years. The lease will continue to be classified as an operating lease, and no material change is expected from a GAAP revenue perspective. As Ed mentioned, we monetized certain assets during the quarter. In aggregate, we recorded $158 million of gains on those transactions. G&A expense for the quarter was lower year-over-year, primarily driven by stock compensation expense due to the change in fair market value of certain cash-settled stock awards. Finally, during the quarter, we incurred approximately $24 million in impairment charges, primarily related to our investment in Colombia due to the major earthquake the country suffered in August. With that said, our team has had recent discussions with representatives of the Colombian government, and we are encouraged about the direction and future of our facilities there. Steve?
Kevin Hanna: We have also effectively extended the lease term by an additional 10 years. The lease will continue to be classified as an operating lease, and no material change is expected from a GAAP revenue perspective. As Ed mentioned, we monetized certain assets during the quarter. In aggregate, we recorded $158 million of gains on those transactions. G&A expense for the quarter was lower year-over-year, primarily driven by stock compensation expense due to the change in fair market value of certain cash-settled stock awards. Finally, during the quarter, we incurred approximately $24 million in impairment charges, primarily related to our investment in Colombia due to the major earthquake the country suffered in August. With that said, our team has had recent discussions with representatives of the Colombian government, and we are encouraged about the direction and future of our facilities there. Steve?
Speaker #2: We've also effectively extended the lease term by an additional 10 years. The lease will continue to be classified as an operating lease and no material change is expected from a gap revenue perspective.
Speaker #2: As Ed mentioned, we monetize certain assets during the quarter and aggregate we recorded $158 million of gains on those transactions. G&A expense for the quarter was lower year over year primarily driven by stock compensation expense due to the change in fair market value of certain cash settled stock awards.
Speaker #2: Finally, during the quarter, we incurred approximately $24 million in impairment charges, primarily related to our investments in Colombia due to the major earthquake that country suffered in August. With that said, our team has had recent discussions with representatives of the Colombian government, and we are encouraged about the direction and future of our facilities there.
Speaker #2: Steve?
Steven Hamner: Thank you, Kevin. Last quarter, we described a two-step process for addressing our 2026 and 2027 maturities and reducing our debt. I will give a brief recap of step one, which was completed in early August, and a status report on step two. In August, we issued $2.4 billion of secured notes to first, fully redeem the EUR 500 million of notes due earlier this month. Second, redeem about $735 million of the $1.4 billion of notes due next October. And third, exchange about $1 billion of longer-dated notes. Through this exchange, we captured about $123 million in net discount, and Kevin has just described the accounting for that. Step two will involve, one, the extension of our multi-year bank revolver. Two, the permanent repayment of our $200 million term loan due in June 2027. And three, the refinancing of the remaining $665 million in the 2027 notes.
Steven Hamner: Thank you, Kevin. Last quarter, we described a two-step process for addressing our 2026 and 2027 maturities and reducing our debt. I will give a brief recap of step one, which was completed in early August, and a status report on step two. In August, we issued $2.4 billion of secured notes to first, fully redeem the EUR 500 million of notes due earlier this month. Second, redeem about $735 million of the $1.4 billion of notes due next October. And third, exchange about $1 billion of longer-dated notes. Through this exchange, we captured about $123 million in net discount, and Kevin has just described the accounting for that. Step two will involve, one, the extension of our multi-year bank revolver. Two, the permanent repayment of our $200 million term loan due in June 2027. And three, the refinancing of the remaining $665 million in the 2027 notes.
Speaker #5: Thank you, Kevin. Last quarter, we described a two-step process for addressing our 2026 and 2027 maturities and reducing our debt. I'll give a brief recap of step one, which was completed in early August, and establish report on step two.
Speaker #5: In August, we issued $2.4 billion of secured notes to first fully redeem the €500 million of notes due earlier this month. Second, redeem about $735 million of the $1.4 billion of notes due next October.
Speaker #5: And third, exchange about a billion dollars of longer dated notes. Through this exchange, we captured about $123 million in net discount and Kevin has just described the accounting for that.
Speaker #5: Step two, we'll involve one, the extension of our multi-year bank revolver. Two, the permanent repayment of our $200 million term loan due in June 2027.
Speaker #5: And three, the refinancing of the remaining $665 million in the 2027 notes. All those step two is not yet completed. I will describe our current progress as of today.
Steven Hamner: Although step two is not yet completed, I will describe our current progress as of today. We are in the bank market for a new multi-year revolver that we expect to complete in coming weeks. Importantly, we expect that the terms of the new revolver will eliminate the secured leverage financial covenant and provide additional headroom under both the fixed charge coverage covenant and the total leverage financial covenant. We expect that this new covenant package will provide us with significant flexibility to address longer-dated maturities beyond 2027. We are still considering the appropriate size of the new revolver. But in any case, we will purposefully downsize the current revolver commitment of about $1.3 billion to a level more aligned with our current needs. By doing so, and freeing up the collateral that currently secures our total roughly $1.5 billion credit facility, along with repaying the $200 million term loan.
Steven Hamner: Although step two is not yet completed, I will describe our current progress as of today. We are in the bank market for a new multi-year revolver that we expect to complete in coming weeks. Importantly, we expect that the terms of the new revolver will eliminate the secured leverage financial covenant and provide additional headroom under both the fixed charge coverage covenant and the total leverage financial covenant. We expect that this new covenant package will provide us with significant flexibility to address longer-dated maturities beyond 2027. We are still considering the appropriate size of the new revolver. But in any case, we will purposefully downsize the current revolver commitment of about $1.3 billion to a level more aligned with our current needs. By doing so, and freeing up the collateral that currently secures our total roughly $1.5 billion credit facility, along with repaying the $200 million term loan.
Speaker #5: We are in the bank market for a new multi-year revolver that we expect to complete in coming weeks. Importantly, we expect that the terms of the new revolver will eliminate the secured leverage financial covenant and provide additional headroom under both the fixed charge coverage covenant and the total leverage financial covenant.
Speaker #5: We expect that this new covenant package will provide us with significant flexibility to address longer dated maturities beyond 2027. We're still considering the appropriate size of the new revolver, but in any case, we will purposefully downsize the current revolver commitment of about $1.3 billion to a level more aligned with our current needs.
Speaker #5: By doing so, and freeing up the collateral that currently secures our total, roughly $1.5 billion credit facility, along with repaying the $200 million term loan, we will create substantial additional secured financing capacity to further refinance our existing debt.
Steven Hamner: We will create substantial additional secured financing capacity to further refinance our existing debt, including the 2027 notes that I just mentioned. We continue to evaluate the timing and structure of that refinancing, but we are eager to get it done sooner than later. However we decide to allocate this $1.5 billion collateral capacity between a revolver and other secured financing alternatives, we expect the result will be that we have no maturities until June 2028, when about GBP 600 million of sterling bonds are due. And that expected position does not contemplate use of the cash we have as of 30 September. That cash gives us flexibility to decide which additional longer-term debt to retire and when. To recap what we have previously reported, we received $600 million in sale proceeds in the Q2. Q3.
Steven Hamner: We will create substantial additional secured financing capacity to further refinance our existing debt, including the 2027 notes that I just mentioned. We continue to evaluate the timing and structure of that refinancing, but we are eager to get it done sooner than later. However we decide to allocate this $1.5 billion collateral capacity between a revolver and other secured financing alternatives, we expect the result will be that we have no maturities until June 2028, when about GBP 600 million of sterling bonds are due. And that expected position does not contemplate use of the cash we have as of 30 September. That cash gives us flexibility to decide which additional longer-term debt to retire and when. To recap what we have previously reported, we received $600 million in sale proceeds in the Q2. Q3.
Speaker #5: Including the 2027 notes that I just mentioned. We continue to evaluate the timing and structure of that refinancing, but we are eager to get it done sooner than later.
Speaker #5: However, we decide to allocate this $1.5 billion collateral capacity between a revolver and other secured financing alternatives we expect the result will be that we have no maturities until June 2028 when about $600 million of sterling bonds are due.
Speaker #5: And that expected position does not contemplate use of the cash we have as of September 30th. That cash gives us flexibility to decide which additional longer term debt to retire and when.
Speaker #5: To recap what we have previously reported, we received $600 million in sale proceeds in the second quarter. Third quarter, approximately $140 million from InfraCore, $170 million from the sale of our minority interest in a US joint venture, and $370 million from the sale of two Idaho facilities.
Steven Hamner: Approximately $140 million from Infracore, $170 million from the sale of our minority interest in a US joint venture, and $370 million from the sale of two Idaho facilities. Both of the US portfolios transacted at sub 7% cap rates. As a reminder, since 2022, we have sold hospital real estate for which we paid about $5.6 billion for an aggregate sale price of more than $6.8 billion. And we have collateralized another roughly $3.9 billion in assets at underwritten valuations similarly in excess of our original investments. Combined, those transactions reflect about a 23% increase in value over our original undepreciated book values. Our bond indentures provide us with flexibility as well. As of 30 September, our unencumbered assets to unsecured debt ratio is more than 180%, reflecting substantial headroom in excess of the 150% covenant headroom created by our August financing.
Steven Hamner: Approximately $140 million from Infracore, $170 million from the sale of our minority interest in a US joint venture, and $370 million from the sale of two Idaho facilities. Both of the US portfolios transacted at sub 7% cap rates. As a reminder, since 2022, we have sold hospital real estate for which we paid about $5.6 billion for an aggregate sale price of more than $6.8 billion. And we have collateralized another roughly $3.9 billion in assets at underwritten valuations similarly in excess of our original investments. Combined, those transactions reflect about a 23% increase in value over our original undepreciated book values. Our bond indentures provide us with flexibility as well. As of 30 September, our unencumbered assets to unsecured debt ratio is more than 180%, reflecting substantial headroom in excess of the 150% covenant headroom created by our August financing.
Speaker #5: Both of the US portfolios transacted at sub 7% cap rates. And as a reminder, since 2022, we have sold hospital real estate for which we paid about $5.6 billion for an aggregate sale price of more than $6.8 billion.
Speaker #5: And we have collateralized another roughly $3.9 billion in assets at underwritten valuations similarly in excess of our original investments. Combined those transactions reflect about a $23% increase in value over our original underappreciated book values.
Speaker #5: Our bond indentures provide us with flexibility as well. As of September 30th, our unencumbered assets to unsecured debt ratio is more than $180%, reflecting substantial headroom in excess of the $150% covenant, headroom created by our August financing, we anticipate that further headroom will be created with the completion of step two, up to $225%.
Steven Hamner: We anticipate that further headroom will be created with the completion of step 2, up to 225%. It could increase even further with additional transactions that we are considering. That headroom, together with the additional financial covenant headroom and secured financing capacity we expect to create through our revolver extension, as well as further financing optionality provided under our bond indentures, will provide us with additional flexibility to continue deleveraging our balance sheet. With that, we will open up the call for questions. Jesse?
Steven Hamner: We anticipate that further headroom will be created with the completion of step 2, up to 225%. It could increase even further with additional transactions that we are considering. That headroom, together with the additional financial covenant headroom and secured financing capacity we expect to create through our revolver extension, as well as further financing optionality provided under our bond indentures, will provide us with additional flexibility to continue deleveraging our balance sheet. With that, we will open up the call for questions. Jesse?
Speaker #5: And it could increase even further with additional transactions that we are considering. That headroom together with the additional financial covenant headroom and secured financing capacity we expect to create through our revolver extension.
Speaker #5: As well as further financing optionality provided under our bond indentures. We'll provide us with additional flexibility to continue the leveraging our balance sheet. With that, we'll open up the call for questions.
Speaker #5: Jesse?
Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Mueller with JP Morgan. Your line is open. Please go ahead.
Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Mueller with JP Morgan. Your line is open. Please go ahead.
Speaker #4: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand.
Speaker #4: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.
Speaker #4: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Mike Muller with JP Morgan.
Speaker #4: Your line is open. Please go ahead.
Michael Mueller: Yeah. Hi. Good morning. I will ask just 2 HSA questions. I am sure you are going to get a bunch of Priory questions, but when do you expect to now resume rent collections for that portfolio? At what level, compared to the last time you were collecting rent? The second question would be, what would it take to trigger a real plan B here where you are looking at bringing in completely different operators or just something along those lines?
Mike Mueller: Yeah. Hi. Good morning. I will ask just 2 HSA questions. I am sure you are going to get a bunch of Priory questions, but when do you expect to now resume rent collections for that portfolio? At what level, compared to the last time you were collecting rent? The second question would be, what would it take to trigger a real plan B here where you are looking at bringing in completely different operators or just something along those lines?
Speaker #3: Yeah. Hi. Good morning. I'll ask just two HSA questions. I'm sure you're going to get a bunch of prior questions, but when do you expect to now resume rent collections for that portfolio?
Speaker #3: And it would level compared to the last time you were collecting rent. And then the second question would be, what would it take to trigger a real plan B here where you're looking at bringing in completely different operators or just something along those lines?
Ed Aldag: Mike, I think it is important to note that the operations at these hospitals is very strong and continues to be strong. Let me just give you some points here. The surgeries, the overall volume is up 14% since September. The surgeries themselves are up 33%. They have recently entered into agreement with Miami's largest HMO that has made these hospitals their preferred hospital network for their members. That should start increasing the patient volumes even further. I know we always focus on the Miami hospitals, but also in Houston, Sam Houston State University has entered into an agreement to begin their residency program at the St. Joseph Hospital. Hialeah Hospital's residency program has now been accepted and will be started in 2027. Both of those 2 items will increase the CMS reimbursement for HSA. So from an operational standpoint, we feel good about the hospitals.
Edward K. Aldag Jr.: Mike, I think it is important to note that the operations at these hospitals is very strong and continues to be strong. Let me just give you some points here. The surgeries, the overall volume is up 14% since September. The surgeries themselves are up 33%. They have recently entered into agreement with Miami's largest HMO that has made these hospitals their preferred hospital network for their members. That should start increasing the patient volumes even further. I know we always focus on the Miami hospitals, but also in Houston, Sam Houston State University has entered into an agreement to begin their residency program at the St. Joseph Hospital. Hialeah Hospital's residency program has now been accepted and will be started in 2027. Both of those 2 items will increase the CMS reimbursement for HSA. So from an operational standpoint, we feel good about the hospitals.
Speaker #2: Mike, I think it's important to note that the operations at these hospitals is very strong and continues to be strong. Let me just give you some points here.
Speaker #2: The surgeries, the overall volume is up 14% since September. The surgeries themselves are up 33%. They've recently entered to agreement with Miami's largest HMO that has made these hospitals their preferred hospital network for their members.
Speaker #2: That should start increasing the patient volumes even further. I know we always focus on the Miami hospitals, but also in Houston, Sam Houston State University has entered into an agreement to begin their residency program at the St.
Speaker #2: Joseph Hospital—Hi. Leah Hospital's residency program has now been accepted and will be started in 2007. Both of those two items will increase the CMS reimbursement for HSA.
Speaker #2: So from an operational standpoint, we feel good about the hospitals. Ovation has been in there for about a month, reviewing the situation at the hospitals, reviewing the different procedures.
Ed Aldag: Ovation has been in there for about a month, reviewing the situation at the hospitals, reviewing the different procedures. Since August, the cash collections at HSA has increased 24%. Those are all significant items. Exactly when they will start paying rent again, I am not exactly sure. We certainly have not projected it at this point. It is not as if there is an issue with the operations at the hospital. It literally has been an issue with the billing and the collections. We have a lot of confidence in Ovation's ability to come in and fix that. Was there a second part of the question?
Edward K. Aldag Jr.: Ovation has been in there for about a month, reviewing the situation at the hospitals, reviewing the different procedures. Since August, the cash collections at HSA has increased 24%. Those are all significant items. Exactly when they will start paying rent again, I am not exactly sure. We certainly have not projected it at this point. It is not as if there is an issue with the operations at the hospital. It literally has been an issue with the billing and the collections. We have a lot of confidence in Ovation's ability to come in and fix that. Was there a second part of the question?
Speaker #2: Since August, the cash collections at HSA has increased 24%. Those are all significant items. So exactly when they'll start paying rent again, I'm not exactly sure.
Speaker #2: We certainly haven't projected it at this point, but it's not as if there's an issue with the operations at the hospital. It literally has been an issue with the billing and the collections.
Speaker #2: We have a lot of confidence in Ovation's ability to come in and fix that. And was there a second part of the question?
Michael Mueller: When might we do something more drastic?
Mike Mueller: When might we do something more drastic?
Speaker #5: When might we do something more drastic?
Ed Aldag: Well, if HSA's operations were declining or continuing to decline, that is certainly an item that we would look at doing.
Edward K. Aldag Jr.: Well, if HSA's operations were declining or continuing to decline, that is certainly an item that we would look at doing.
Speaker #2: Oh, well, if HSA's operations were declining or continuing to decline, that certainly an item that we would look at doing.
Michael Mueller: Okay. Appreciate it. Thank you.
Mike Mueller: Okay. Appreciate it. Thank you.
Speaker #3: Okay. Appreciate it. Thank you.
Operator: Your next question comes from the line of Farrell Granath with Bank of America. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Farrell Granath with Bank of America. Your line is open. Please go ahead.
Speaker #4: Your next question comes from the line of Pharrell Granith with Bank of America. Your line is open. Please go ahead.
Andrew Reale: Hi, good morning. This is Andrew Reale on for Farrell. Thanks a lot for taking our questions. First, just with asset sale proceeds now in hand, could you just speak in a little more detail to how much room they are creating under the secured debt limit? Then should we expect those proceeds to go towards the remaining 2027 maturities?
Andrew Reale: Hi, good morning. This is Andrew Reale on for Farrell. Thanks a lot for taking our questions. First, just with asset sale proceeds now in hand, could you just speak in a little more detail to how much room they are creating under the secured debt limit? Then should we expect those proceeds to go towards the remaining 2027 maturities?
Speaker #6: Hi. Good morning. This is Andrew Riel on for Pharrell. Thanks a lot for taking our questions. I guess first, just with asset sale proceeds now in hand, could you just speak in a little more detail to how much room they're creating under the secured debt limit?
Speaker #6: And then should we expect those proceeds to go towards the remaining $27 maturities?
Steven Hamner: Well, in the spirit of everything is fungible, we expect the step 2 financings that I just described will address the remaining 2027s. That leaves cash from asset sales, as I mentioned, for addressing longer-dated maturities beyond the 2027s. Whether it is sequentially, just to bring down the 2028s or to spread it across the maturities, we have that optionality. But we have not made any specific determination at this point.
Steven Hamner: Well, in the spirit of everything is fungible, we expect the step 2 financings that I just described will address the remaining 2027s. That leaves cash from asset sales, as I mentioned, for addressing longer-dated maturities beyond the 2027s. Whether it is sequentially, just to bring down the 2028s or to spread it across the maturities, we have that optionality. But we have not made any specific determination at this point.
Speaker #2: Well, in the spirit of everything
Speaker #5: is fungible, we expect the step two financings that I just described will address the remaining 2027s. And that leaves cash from asset sales as I mentioned for addressing longer dated maturities beyond the 27s.
Speaker #5: Whether it's sequentially just to bring down the 28s or to spread it across the maturities, we have those we have that optionality. But we haven't made any specific determination at this point.
Andrew Reale: Okay, thank you. Then where does the working capital balance to HSA stand today?
Andrew Reale: Okay, thank you. Then where does the working capital balance to HSA stand today?
Speaker #6: Okay, thank you. And then, where does the working capital balance for HSA stand today?
Steven Hamner: Our loan to HSA, is that?
Steven Hamner: Our loan to HSA, is that?
Speaker #5: Our loan to HSA, is that?
Andrew Reale: Correct.
Andrew Reale: Correct.
Speaker #6: Correct.
Ed Aldag: It's 150.
Edward K. Aldag Jr.: It's 150.
Speaker #5: One.
Speaker #2: It's 150.
Steven Hamner: Yeah.
Steven Hamner: Yeah.
Ed Aldag: 150 million.
Edward K. Aldag Jr.: 150 million.
Speaker #5: Yeah. About 150 million. Yeah.
Steven Hamner: About 150 million. Yep.
Steven Hamner: About 150 million. Yep.
Andrew Reale: Okay, thank you.
Andrew Reale: Okay, thank you.
Speaker #6: Okay. Thank you.
Operator: Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open. Please go ahead.
Speaker #4: Your next question comes from the line of Michael Carroll with JP RBC Capital Markets. Your line is open. Please go ahead.
Michael Carroll: Yeah, thanks. I guess, Ed or Steve, can you provide some additional color on the Priory lease restructuring? What did MPT receive in return for the rent cut? I know you mentioned something that MPT can share on the upside when the recovery happens. Is that like some form of percentage rent? You said there was an ability to extend the lease term at your option. When does the lease expire now, and you can extend it out 10 years from that point?
Michael Carroll: Yeah, thanks. I guess, Ed or Steve, can you provide some additional color on the Priory lease restructuring? What did MPT receive in return for the rent cut? I know you mentioned something that MPT can share on the upside when the recovery happens. Is that like some form of percentage rent? You said there was an ability to extend the lease term at your option. When does the lease expire now, and you can extend it out 10 years from that point?
Speaker #6: Yeah. Thanks. I guess Ed or Steve, can you provide some additional color on the priority lease restructuring? What did MPT receive in return for the rent cut?
Speaker #6: I know you mentioned something that MPT can share on the upside when the recovery happens. Is that some form of percentage rent? And then you said there was a ability to extend the lease termature option.
Speaker #6: When does the lease expire now? And you can extend it out 10 years from that point?
Ed Aldag: Yeah. Mike, I will answer your questions, but let me point out that we have a great deal of confidence in Priory's ability to operate. This truly is not a situation where there is a lack of demand or an inability to operate. We believe that Priory is absolutely the best operator for these facilities. This is entirely a situation where the UK government, and obviously where we are concerned, particularly the NHS, has budget constraints and has limited the number of NHS patients in behavioral health facilities. Probably the most important thing that we received out of this is greatly enhancing our financial credit with the parent company of Priory.
Edward K. Aldag Jr.: Yeah. Mike, I will answer your questions, but let me point out that we have a great deal of confidence in Priory's ability to operate. This truly is not a situation where there is a lack of demand or an inability to operate. We believe that Priory is absolutely the best operator for these facilities. This is entirely a situation where the UK government, and obviously where we are concerned, particularly the NHS, has budget constraints and has limited the number of NHS patients in behavioral health facilities. Probably the most important thing that we received out of this is greatly enhancing our financial credit with the parent company of Priory.
Speaker #2: Yeah. So, Mike, let me—I'll answer your questions, but let me point out that we have a great deal of confidence in Priority's ability to operate.
Speaker #2: This truly is in the situation where there's a lack of demand or an inability to operate. We believe that priority is absolutely the best operator for these facilities.
Speaker #2: This is entirely a situation where the UK government and obviously where we're concerned, particularly the NHS, has budget constraints and has limited the number of NHS patients and behavioral health facilities.
Speaker #2: Probably the most important thing that we received out of this is greatly enhancing our financial credit with the parent company priority.
Steven Hamner: That is the main thing, Mike, as Ed just mentioned, we have a much improved credit perimeter with Priory and actually its ownership parent. Our ability now is to extend the lease to 2055. That is totally within our discretion. Yes, as revenue recovers, whether from NHS or elsewhere, we have the opportunity to recover the foregone rent. Kevin mentioned starting at GBP 11 million, that escalates. As revenue recovers, the rent would also recover. I would point out that in recent weeks, if not months, we think we did this at the bottom because revenue is already increasing. We are already seeing improving operations and revenue at Priory.
Steven Hamner: That is the main thing, Mike, as Ed just mentioned, we have a much improved credit perimeter with Priory and actually its ownership parent. Our ability now is to extend the lease to 2055. That is totally within our discretion. Yes, as revenue recovers, whether from NHS or elsewhere, we have the opportunity to recover the foregone rent. Kevin mentioned starting at GBP 11 million, that escalates. As revenue recovers, the rent would also recover. I would point out that in recent weeks, if not months, we think we did this at the bottom because revenue is already increasing. We are already seeing improving operations and revenue at Priory.
Speaker #5: That's the main thing, Mike, is I just mentioned we have a much improved credit perimeter. With priority and actually its ownership parent, our ability now is to extend the lease to 2055.
Speaker #5: That's totally within our discretion. And yes, as revenue recovers, whether from NHS or elsewhere, we have the opportunity to recover the foregone rent I think Kevin mentioned starting at $11 million pounds that escalates.
Speaker #5: But as revenue recovers, the rent would also recover. And I would point out that in recent weeks, if not months, we think we did this at the bottom because revenue is already increasing.
Speaker #5: We're already seeing improving operations and revenue at priority.
Michael Carroll: Okay, then switching over to Noor and HSA, it looks like in the supplement on the development tab, the budgets for the Noor development and some of the HSA developments increased pretty noticeably, specifically at Noor. Can you talk about what drove those increases? Did new projects get added to that, or did the scope of the existing projects just get bigger?
Michael Carroll: Okay, then switching over to Noor and HSA, it looks like in the supplement on the development tab, the budgets for the Noor development and some of the HSA developments increased pretty noticeably, specifically at Noor. Can you talk about what drove those increases? Did new projects get added to that, or did the scope of the existing projects just get bigger?
Speaker #6: Okay. And then, switching over to Nor and HSA, it looks like in the supplemental on the development tab that the budgets for the Nor development and some of the HSA developments increased pretty noticeably.
Speaker #6: Specifically at Nor, can you kind of talk about what drove those increases? I mean, did new projects get added to that or did the scope of the existing projects just get bigger?
Ed Aldag: Remember that on Noor, the vast majority of that is for a new ED at the largest hospital in that portfolio, and that actually started under the previous owner's Prospect. Obviously, there is also the continued seismic work that is going on there, but the vast majority of it is the ED. That is an important project, was an important project on Prospect. It got sidelined during the bankruptcy, and it is back in full speed.
Edward K. Aldag Jr.: Remember that on Noor, the vast majority of that is for a new ED at the largest hospital in that portfolio, and that actually started under the previous owner's Prospect. Obviously, there is also the continued seismic work that is going on there, but the vast majority of it is the ED. That is an important project, was an important project on Prospect. It got sidelined during the bankruptcy, and it is back in full speed.
Speaker #2: Yeah. I remember that on Nor, the vast majority of that is for a new ED at the largest hospital in that portfolio. And that actually started under the previous owner's prospect.
Speaker #2: Obviously, there's also the continued seismic work that's going on there. But the vast majority of it is the ED. That's an important project—was an important project—on a prospect that got sidelined during the bankruptcy.
Speaker #2: And it's back in full speed.
Michael Carroll: Then HSA?
Michael Carroll: Then HSA?
Speaker #6: And then HSA?
Ed Aldag: Oh, the H-- gosh, goodness, all day I have had trouble with that. HSA is primarily elevators, boilers, chillers, roofs, basic type of situation. The biggest project is the project that we announced a while back, which is the replacement of a parking garage at Hialeah.
Edward K. Aldag Jr.: Oh, the H-- gosh, goodness, all day I have had trouble with that. HSA is primarily elevators, boilers, chillers, roofs, basic type of situation. The biggest project is the project that we announced a while back, which is the replacement of a parking garage at Hialeah.
Speaker #2: Oh, gosh, goodness. All day I've had trouble with that. HSA is primarily elevators, boilers, chillers, roofs—basic type of situation. The biggest project is the project that we've announced a while back, which is the replacement of a parking garage at High Elliot.
Michael Carroll: Okay. Then just if I can sneak one last one in there, I guess, Steve, can you talk about how MPT plans on raising additional capital? I know you talked a little bit about the phase 2 of the debt refinancing. Are there more asset sales on tap? At what point do you start thinking about the dividend, just given where earnings have been trending with the Priory and the HSA situations?
Michael Carroll: Okay. Then just if I can sneak one last one in there, I guess, Steve, can you talk about how MPT plans on raising additional capital? I know you talked a little bit about the phase 2 of the debt refinancing. Are there more asset sales on tap? At what point do you start thinking about the dividend, just given where earnings have been trending with the Priory and the HSA situations?
Speaker #6: Okay. And then just if I can sneak one last one in there. I guess, Steve, can you talk about, I guess, how MPT plans on raising additional capital?
Speaker #6: I know you talked a little bit about some of phase two of the debt refinancing. I mean, are there more asset sales on tap? And at what point do you start thinking about the dividend, just given where earnings have been trending with this priority and the HSA situations?
Steven Hamner: Well, as we have discussed lo these many quarters now, we continue to have a lot of flexibility, Mike. You mentioned asset sales. There is nothing meaningful pending. We are not in the market for any particular portfolios or assets. There may be a one-off here and there like we have done recently. My point in kind of going through the recent history where we have sold or monetized upwards of $9 billion in assets at significant premiums over our original investment, was in fact to point out that that is available. We continue with the balance sheet restructuring, the extension of maturities, and modest reduction of debt to give us a longer runway to continue improving operations, including with the HSA situation. We have options, and we have the luxury of some time before we have to or would consider more drastic alternatives.
Steven Hamner: Well, as we have discussed lo these many quarters now, we continue to have a lot of flexibility, Mike. You mentioned asset sales. There is nothing meaningful pending. We are not in the market for any particular portfolios or assets. There may be a one-off here and there like we have done recently. My point in kind of going through the recent history where we have sold or monetized upwards of $9 billion in assets at significant premiums over our original investment, was in fact to point out that that is available. We continue with the balance sheet restructuring, the extension of maturities, and modest reduction of debt to give us a longer runway to continue improving operations, including with the HSA situation. We have options, and we have the luxury of some time before we have to or would consider more drastic alternatives.
Speaker #5: So as we've discussed, low these many quarters now, we continue to have a lot of flexibility, Mike. You mentioned asset sales. There's nothing meaningful pending we're not in the market for any particular portfolios or assets.
Speaker #5: I mean, there may be a one-off here and there like we've done recently. My point in kind of going through the recent history where we've sold or monetized upwards of $9 billion in assets at significant premiums over our original investment, what was in fact to point out that that is available, we continue with the.
Speaker #5: Balance sheet restructuring, the extension of maturities, and modest reduction of debt to give us longer runway to continue improving operations including with the HSA situation.
Speaker #5: So, we have options, and we have the luxury of some time before we have to, or would consider, more drastic alternatives.
Michael Carroll: Okay, thanks.
Michael Carroll: Okay, thanks.
Speaker #6: Okay. Thanks.
Operator: This concludes today's Q&A. I will now turn the call back over to Ed Aldag, CEO, for closing remarks.
Operator: This concludes today's Q&A. I will now turn the call back over to Ed Aldag, CEO, for closing remarks.
Speaker #4: This concludes today's Q&A. I will now turn the call back over to Ed Aldag, CEO, for closing remarks.
Ed Aldag: Thank you, Jesse, and if anybody has any follow-up questions, please don't hesitate to reach out to Charles, and we'll get back with you. Thank you very much.
Edward K. Aldag Jr.: Thank you, Jesse, and if anybody has any follow-up questions, please don't hesitate to reach out to Charles, and we'll get back with you. Thank you very much.
Speaker #2: Thank you, Jesse. And if anybody has any follow-up questions, please don't hesitate to reach out to Charles and we'll get back with you. So thank you very much.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Speaker #4: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This event has now concluded. Thank you for joining Medical Properties.
