Senior Housing Properties Trust (SNH, Financial) filed Quarterly Report for the period ended 2010-03-31.
Senior Housing Properties Trust has a market cap of $2.87 billion; its shares were traded at around $22.51 with and P/S ratio of 9.7. The dividend yield of Senior Housing Properties Trust stocks is 6.4%.SNH is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Jim Simons of Renaissance Technologies LLC.
Debt Covenants Our principal debt obligations at March 31, 2010, were our unsecured revolving credit facility, two public issues of unsecured senior notes totaling $322.5 million and $643.0 million of mortgages secured by 61 of our properties. Our unsecured senior notes are governed by an indenture. The indenture for our unsecured senior notes and related supplements and our revolving credit facility contain a number of covenants which restrict our ability to incur debts, including debts secured by mortgages on our properties in excess of calculated amounts, require us to maintain a minimum net worth, restrict our ability to make distributions under certain circumstances and generally require us to maintain certain other financial ratios. As of March 31, 2010, we believe we were in compliance with all of the covenants under our indenture and related supplements, our revolving credit facility and our other debt obligations.
Our public debt indenture and related supplements contain cross default provisions to any other debts of at least $10.0 million or, with respect to certain notes under such indenture and supplements, higher amounts. Similarly, our revolving credit facility contains a cross default provision to any other debts of $25.0 million or more that are recourse debts and to any other debts of $75.0 million or more that are non-recourse debts. Any termination of our business management agreement with RMR would cause a default under our revolving credit facility, if not approved by a majority of our lenders.
Five Star is our largest tenant and it is our former subsidiary. We beneficially own more than 9% of Five Stars common shares. RMR provides management services to both us and Five Star. Five Star pays us rent based on minimum annual rent amounts plus percentage rent based on increases in gross revenues at certain properties. As of March 31, 2010, we leased 190 senior living communities and two rehabilitation hospitals to Five Star. During the three months ended March 31, 2010, we purchased $6.2 million of improvements made to our properties that are leased to Five Star. We used cash on hand to fund this purchase. As a result of this purchase, the annual rent payable to us by Five Star increased by approximately $495,000. Five Stars total minimum annual rent payable to us under those leases as of March 31, 2010 was $184.9 million, excluding percentage rent based on increases in gross revenues at certain properties. Additional information regarding our leases with Five Star appears in Item 1 of our Annual Report under the captions Business Tenants and Business Lease Terms.
Our unsecured revolving credit facility accrues interest at floating rates and matures in December 2010. Subject to certain conditions, we can extend the maturity for one year upon payment of a fee. At March 31, 2010, we had $58.0 million outstanding and $492.0 million available for borrowing under our revolving credit facility. At May 5, 2010, we had zero amounts outstanding and $550.0 million available for borrowing under our revolving credit facility. We may make repayments and drawings under our revolving credit facility at any time without penalty. We borrow in U.S. dollars and borrowings under our revolving credit facility accrue interest at LIBOR plus a spread. Accordingly, we are vulnerable to changes in U.S. dollar based short term rates, specifically LIBOR. In addition, upon renewal or refinancing of our revolving credit facility, we are vulnerable to increases in credit spreads due to market conditions. A change in interest rates would not affect the value of our floating rate debt but would affect our operating results. For example, the interest rate payable on our outstanding revolving indebtedness of $58.0 million at March 31, 2010, was 1.03%. The following table presents the impact a 10% change in interest rates would have on our annual floating rate interest expense at March 31, 2010 (dollars in thousands):
On August 4, 2009, we closed a FNMA mortgage financing for approximately $512.9 million. A part of this borrowing is at a fixed interest rate ($307.7 million) and a part is at a floating rate ($205.2 million) calculated as a spread above LIBOR. A change in market interest rates will not change the value of the floating rate part of this loan but will change the interest expense on the floating rate part of this
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Senior Housing Properties Trust has a market cap of $2.87 billion; its shares were traded at around $22.51 with and P/S ratio of 9.7. The dividend yield of Senior Housing Properties Trust stocks is 6.4%.SNH is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
On April 1, 2010, we declared a quarterly distribution of $0.36 per common share, or $45.9 million, to our common shareholders for the quarter ended March 31, 2010. This distribution will be paid to shareholders on or about May 14, 2010, using cash on hand and borrowings under our revolving credit facility.Debt Covenants Our principal debt obligations at March 31, 2010, were our unsecured revolving credit facility, two public issues of unsecured senior notes totaling $322.5 million and $643.0 million of mortgages secured by 61 of our properties. Our unsecured senior notes are governed by an indenture. The indenture for our unsecured senior notes and related supplements and our revolving credit facility contain a number of covenants which restrict our ability to incur debts, including debts secured by mortgages on our properties in excess of calculated amounts, require us to maintain a minimum net worth, restrict our ability to make distributions under certain circumstances and generally require us to maintain certain other financial ratios. As of March 31, 2010, we believe we were in compliance with all of the covenants under our indenture and related supplements, our revolving credit facility and our other debt obligations.
Our public debt indenture and related supplements contain cross default provisions to any other debts of at least $10.0 million or, with respect to certain notes under such indenture and supplements, higher amounts. Similarly, our revolving credit facility contains a cross default provision to any other debts of $25.0 million or more that are recourse debts and to any other debts of $75.0 million or more that are non-recourse debts. Any termination of our business management agreement with RMR would cause a default under our revolving credit facility, if not approved by a majority of our lenders.
Five Star is our largest tenant and it is our former subsidiary. We beneficially own more than 9% of Five Stars common shares. RMR provides management services to both us and Five Star. Five Star pays us rent based on minimum annual rent amounts plus percentage rent based on increases in gross revenues at certain properties. As of March 31, 2010, we leased 190 senior living communities and two rehabilitation hospitals to Five Star. During the three months ended March 31, 2010, we purchased $6.2 million of improvements made to our properties that are leased to Five Star. We used cash on hand to fund this purchase. As a result of this purchase, the annual rent payable to us by Five Star increased by approximately $495,000. Five Stars total minimum annual rent payable to us under those leases as of March 31, 2010 was $184.9 million, excluding percentage rent based on increases in gross revenues at certain properties. Additional information regarding our leases with Five Star appears in Item 1 of our Annual Report under the captions Business Tenants and Business Lease Terms.
Our unsecured revolving credit facility accrues interest at floating rates and matures in December 2010. Subject to certain conditions, we can extend the maturity for one year upon payment of a fee. At March 31, 2010, we had $58.0 million outstanding and $492.0 million available for borrowing under our revolving credit facility. At May 5, 2010, we had zero amounts outstanding and $550.0 million available for borrowing under our revolving credit facility. We may make repayments and drawings under our revolving credit facility at any time without penalty. We borrow in U.S. dollars and borrowings under our revolving credit facility accrue interest at LIBOR plus a spread. Accordingly, we are vulnerable to changes in U.S. dollar based short term rates, specifically LIBOR. In addition, upon renewal or refinancing of our revolving credit facility, we are vulnerable to increases in credit spreads due to market conditions. A change in interest rates would not affect the value of our floating rate debt but would affect our operating results. For example, the interest rate payable on our outstanding revolving indebtedness of $58.0 million at March 31, 2010, was 1.03%. The following table presents the impact a 10% change in interest rates would have on our annual floating rate interest expense at March 31, 2010 (dollars in thousands):
On August 4, 2009, we closed a FNMA mortgage financing for approximately $512.9 million. A part of this borrowing is at a fixed interest rate ($307.7 million) and a part is at a floating rate ($205.2 million) calculated as a spread above LIBOR. A change in market interest rates will not change the value of the floating rate part of this loan but will change the interest expense on the floating rate part of this
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