Business Context and Reporting Period
This Form 8-K filing by Care Investment Trust Inc. (not Tiptree Inc.) covers events occurring on September 20 and September 21, 2011, with a report date of September 26, 2011. The filing details the acquisition of three assisted living and memory care facilities in Virginia from affiliates of Greenfield Senior Living, Inc.
Key Financial Metrics
- Acquisition Price: $20,800,000 aggregate purchase price for three facilities.
- Financing Structure: Approximately $15,500,000 funded via a first mortgage bridge loan; the balance funded with working capital.
- Debt Terms: The bridge loan bears interest at LIBOR plus 400 basis points with no floor. Monthly principal and interest payments commence October 1, 2011.
- Debt Maturity: June 20, 2012, subject to a three-month extension option.
- Guarantees: Care Investment Trust Inc. has guaranteed up to $5,000,000 of the bridge loan obligations.
- Lease Income: The facilities were immediately leased back to Greenfield under a 12-year triple net lease with two 10-year extension options. Aggregate minimum cash rent for the initial year is $1,650,000.
Material Changes
The primary material change is the expansion of the company's asset base through the acquisition of three new senior living facilities. This transaction introduces a new $15.5 million debt obligation and establishes a new revenue stream via the triple net lease with Greenfield Senior Living, Inc.
Outlook, Risks, and Management Commentary
- Refinancing Plan: Management intends to refinance the bridge loan within approximately 90 days of closing through permanent mortgage financing backed by Freddie Mac, with KeyBank acting as the sponsor.
- Lease Security: Greenfield has guaranteed the tenant obligations under the Master Lease, which are further secured by personal property and intangible assets associated with the facilities.
- Financial Reporting: Required financial statements of the acquired businesses and pro forma financial information are not included in this filing and will be provided by amendment within 71 days.
Investor Verification Checklist
- Verify the successful execution of the permanent Freddie Mac refinancing within the 90-day target window to avoid bridge loan maturity risks.
- Confirm the creditworthiness of Greenfield Senior Living, Inc., as they are the sole tenant and guarantor of the lease obligations.
- Monitor the upcoming amendment to this filing for the required financial statements of the acquired facilities and pro forma data.
- Review the specific terms of the triple net lease to ensure all capital costs and maintenance responsibilities are clearly allocated to the tenant.