After several large-scale divestments, one of the largest hospital landlords in the country is cutting its dividend to investors by nearly 50%. Medical Properties Trust, Inc. (NYSE: MPW) announced on Monday that “its Board of Directors has adopted an updated capital allocation strategy designed to significantly strengthen its balance sheet.”
The dividend will be slashed from $0.29 per quarter to $0.15, which, according to the company, should help reduce leverage and improve long-term debt and equity capital costs.
This change follows a number of divestments from MPW’s portfolio after the past 18 months that have resulted in lower adjusted funds from operations, including its partnership with Macquarie Asset Management for eight Massachusetts hospitals (a $1.78 billion deal), the sale of seven Australian hospitals for $474.5 million and the sale of its Connecticut hospitals to Yale New Haven Health for approximately $355 million.
In aggregate these transactions, while profitable, reduce the ccompany’s leased assets by approximately $2.5 billion.
According to the press release, MPW will continue exploring refinancing, sales, and joint-venture opportunities that enable repayment of debt, while maintaining a diversified portfolio in terms of geography, asset type, and tenant mix. In addition, the company has identified certain non-leased and non-real estate assets to be sold, so expect more coverage of those deals on LevinPro HC.
