MPW
#Morning, <UNK>.
Just to clarify, we've got $125 million of term notes due this year.
The first tranche ---+ and it's about 50/50 ---+ the first tranche is July, and then the second one is October, as you point out.
We've got those hedged and have had them hedged for a number of years.
So we won't try to break that match for what would probably cost us money.
We'll just go ahead and pay those off.
We have two bond issues maturing in [2024] that become eligible for call over the next coming months.
And you're right that we absolutely are looking at that.
We'll continue to look at that, as to whether it's beneficial to go ahead and refinance those, call them in.
And under market conditions now, if we could draw a circle around today, it looks like it would be somewhat advantageous for us to do that.
Although we've made no commitments to do any refinancing, it's certainly something that, as you would expect, we're considering.
Six and three-eighths, that's right.
And you're absolutely right ---+ not only is our liquidity improved, but the overall market conditions are substantially improved.
And as we all know, that could change by this afternoon.
But your point is absolutely correct.
With respect to the ERs ---+ and all of those are Adeptus ---+ there is no geographic differentiation.
Those yields range between ---+ pretty much our overall range in this case, between 9% and 10% plus, depending on when we committed under ---+ we've got three tranches, a total of $0.5 billion.
And so as those come on line, depending on which tranche they were in, it falls into those.
And again, those are cash yields.
On the rehab hospital for Ernest ---+ and again, we have never given specific cap rates ---+ but this goes into the Ernest master lease.
And once again, if you take our range that we have given of between 8% and 10%, this one falls right in the middle of that.
Yes, they are locked in.
Once again, depending on which of the three Adeptus tranches, they are locked in.
<UNK>, from a development-acquisition standpoint, we will continue to do the vast, vast majority of our new investments from an acquisition standpoint versus a development standpoint.
From the standpoint of what we like to see on the rental increases, as you know, all of it is a part of the negotiation, so that when you push here, you have to push somewhere else or give somewhere else.
From our general feeling, we like to see the rental increases tied at some inflation number.
We'd like to get that as unlimited as possible, but roughly half the portfolio ends up having some type of collar on that.
<UNK>, let me address those ---+ the last part of that question and make sure I understood it correctly.
So if I don't answer it the way you asked it, please correct me.
But the valuations today are every bit as strong as they were last year in the beginning of the summer.
There was a very short time period, beginning at the end of summer and running through probably last fall, where it seemed that the entire world was kind of on a wait-and-see situation with what was going to happen with the Fed and interest rates and the economy as a whole.
That certainly seems to have subsided some, and we're very comfortable with where the valuations are.
From our standpoint, certainly from a disposition standpoint, we have always thought that our portfolio was much more valuable than the market had given us credit for, and we're very happy to be able to show some of that and prove some of that with some of this disposition activity that we have.
From the standpoint of the rating agencies and getting to be investment grade ---+ that certainly is valuable, but it's not as valuable as it used to be in the old days, with interest rates being as low as they are.
There isn't that much difference these days.
We certainly would very much like to be at investment grade.
But as I have always said, we won't run this Company with just the goal of trying to meet the various aspects or trying to get to investment grade.
There are obviously some of the items in what the rating agencies would like to see that are the same goals as ours.
One of those was increasing in our size, which therefore improves our diversification overall.
As I've said, we've grown; we've almost doubled in size in the last three years.
And very, very importantly to us, and I think to the credit-rating agencies, is that by doing that, we've pushed down our exposure to our properties so that our largest property only represents 2% of our portfolio.
That's outstanding diversification from that standpoint.
One of the headwinds that we will always face is just the hospital healthcare market in general.
When you look at the overall outlook of the credit-rating agencies on hospitals as a whole ---+ which include all the government-run hospitals, which certainly are not our market ---+ it's a negative outlook.
But then when you look at the specific tenants that they cover that are ours, which represent about 60%, 65% of our total revenue, the vast majority of those outlooks are from a positive standpoint.
So I think our continued performance, the continued incredible performance of our existing portfolio and their EBITDAR coverages ---+ I think that the opportunity for us to get moved up to investment-grade rating by all the agencies is certainly one that's a reasonable expectation.
<UNK>, we will continue, certainly as far out as I can see, as being primarily fee-simple owners and straight real estate investors.
Obviously, part of our original model, and it continues to be, that we will make selective investments, like we did with Capella, like we did with Ernest.
But I think you're referring to a different type of instrument that some of our other, particularly larger healthcare peers, have done.
And that is not our target market.
<UNK>, let me start with the LTACHs, and let me remind all of us that the patient criteria [bill], which pretty much started all of this whole discussion, was supported and very much encouraged by the industry.
So there actually is a definition of what constitutes an LTACH patient.
We support that.
We think that ---+ I have always said ---+ as you may recall, I got my start in the physical-rehabilitation business.
What we did back in the early 1980s versus what they do today is very different.
We always have supported pushing things out to the lowest-cost provider.
As technology continues to improve, you'll see that continue to evolve.
We have always said as a part of that, that we pick the very best operators that are able to adjust with the times and adjust with the changes.
And as I stated just a little while ago, in response to someone's question about the LTACH reimbursement, we have been extremely pleased with how well our operators have made adjustments.
We think they're all way ahead of schedule with where we thought they would be with making those adjustments.
We don't have any plans to make any additional LTACH investments at this point.
We, like the rest of the market, are kind of in a wait-and-see from the overall standpoint.
We believe, as does the American Hospital Association, and as does CMS, that the LTACHs actually provide a good service and a good benefit for society as a whole.
But I think that we probably have another 12 to 18 months for all of us to see exactly where this shakes out.
But we're very positive on where it's going at this particular point.
From the rehab standpoint, we continue to be very bullish on the rehab market, as I think most people do.
And again, we very much support pushing patients out to the lowest-cost provider and not having them in a place of higher cost, and therefore higher reimbursement, if they don't need to be.
Again, our operators have been very good at making those adjustments and moving with the times.
And we continue to be very bullish on the whole (inaudible) sector.
Yes, but just to clarify ---+ we don't see any additional growth from people that we're not already doing business with.
It doesn't mean that we may get an opportunity that we think is a really good one.
But we think that the opportunities we have with our existing rehab providers is enough to keep us comfortable in that particular market.
We announce ATM activities with the filing of the appropriate 10-Q.
Thanks, <UNK>.
Thank you, operator.
And again, thank all of you for listening today and for your interest.
And I greatly appreciate all of the questions.
If you have any additional questions throughout the day or throughout the week, please don't hesitate to call any of us here at MPT.
Thank you very much.
