Goldman Sachs Considers $1.2B Junk Bond Offering To Lift Medical Properties Trust
Goldman Sachs is reportedly gauging interest in raising capital to bail out Medical Properties Trust, the country’s largest hospital landlord.
The investment bank is considering a junk bond offering of at least $1.2B that would go to the struggling REIT after the bankruptcy of two major tenants raised concerns about the firm’s operations, Bloomberg Law reported.
The talks are reportedly still in the early stages, but the cash raised would go toward refinancing the company’s debt and boosting liquidity, anonymous sources told the publication. Goldman Sachs didn’t respond to a request for comment Wednesday morning.
Concerns over MPT’s holdings first cropped up last January, when major tenant Steward Health Care reported it was struggling to pay its bills and was working on a potential restructuring. Steward declared Chapter 11 bankruptcy in May.
MPT’s troubles deepened this month, when Prospect Medical, another of the REIT's large tenants, also filed for bankruptcy.
The company reported an $801M net loss on its most recent earnings call in November, with both tenants owing the REIT millions in collective back rent. The firm’s $608M in third-quarter impairment charges included $425M of costs associated with capital loans to Steward. The company also reported a $134M reduction in value for its investment in Prospect Medical.
The bankruptcies have led to the closure of some medical facilities while MPT moved throughout 2024 to sell other assets to help shore up its balance sheet. The REIT also walked away from several properties, returning them to lender Apollo Global Management.
The companies have also drawn scrutiny from Capitol Hill. Four Democratic senators sent a public letter in July to MPT that urged the REIT to provide relief to tenants from what it described as onerous lease obligations and plainly blamed MPT and others for playing “a role in Steward’s financial downfall.”
A bipartisan probe of private equity in healthcare was first launched in 2023, with MPT getting ensnared in December of that year.
Despite the REIT’s struggles, its stock has risen by more than 10% in the last month and is up more than 30% over the last 12 months. The S&P 500 has grown by roughly 25% over the same period.
