Ventas announces plans to acquire full ownership of the collateral pool underlying its $486 million Santerre mezzanine loan

Ventas

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Ventas, Inc. the Company announced today that it intends to take ownership of the collateral underlying its approximately $486 million cash-pay mezzanine loan to Santerre Health Investors, known as the Santerre Mezzanine Loan.

The Santerre Mezzanine Loan is secured by equity interests in entities that collectively own a diverse pool of medical office buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities, and hospital assets in the United States.

Ventas anticipates acquiring ownership of the Santerre Portfolio through a ‘loan to own’ structure in which the outstanding principal amount of the Santerre Mezzanine Loan is converted to equity with no additional consideration paid. The Company currently believes that the impact of acquiring the Santerre Portfolio will be within its forecasted guidance range for 2023 Normalized Funds from Operations, as stated in its 2022 Fourth Quarter and Full Year Earnings and 2023 Outlook release, which was issued on February 9, 2023.

The Company anticipates completing the acquisition of the Santerre Portfolio in the second quarter of 2023. Until Ventas acquires ownership of the Santerre Portfolio, and in accordance with an existing lockbox arrangement, the Company has the right to receive interest income on the Santerre Mezzanine Loan to the extent funds are available.

Under the Santerre Mezzanine Loan, Ventas has received approximately 90% of the interest due in March 2023, and the interest due in January and February 2023 has already been paid in full.

The Company’s ownership of the equity in the Santerre Portfolio will be subject to an existing non-recourse senior loan of approximately $1 billion. Maintaining a strong balance sheet while maintaining a BBB+ rating.

There is no guarantee that the transactions described herein will be completed on the terms described, or at all. Furthermore, while Ventas currently believes that the value of the Santerre Portfolio and other collateral approximates the value of the current loan balance due under the Santerre Senior Loan and the Santerre Mezzanine Loan, there can be no assurance that the Company will not recognize allowances with respect to the Santerre Mezzanine Loan in the future, or that the Company will recognize purchase accounting impacts if the contemplated transactions are completed.

Ventas Inc., an S&P 500 company, operates at the crossroads of two large and rapidly changing industries: healthcare and real estate. Ventas owns a diverse portfolio of over 1,200 properties in the United States, Canada, and the United Kingdom, fueled by strong demographic demand from an aging population.

Ventas leverages its capital to unlock the value of senior living communities, life science, research and development properties, medical office and outpatient facilities, hospitals, and other healthcare real estate. Ventas, a globally recognized real estate investment trust, follows a successful long-term strategy that has been proven over more than 20 years, and is based on diversification of property types, capital sources, and industry leading partners, financial strength and flexibility, consistent and reliable growth, and industry leading ESG achievements.

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