Medical Properties Trust’s stock drops sharply to approach 14-year low as tenant falls $50 million behind on rent

The stock also drew at least one downgrade from an analyst on Friday.

The REIT said late Thursday that it’s taking a fourth-quarter noncash charge of about $225 million to write off consolidated straight-line rent receivables and for other items.

“No assurances can be provided that further impairment of real estate and non-real-estate assets will not be taken with MPT’s fourth-quarter 2023 reporting,” the REIT said.

MPT is expected to report fourth-quarter results on Feb. 1.

Medical Properties Trust said it will accelerate its efforts to recover uncollected rents and outstanding loan obligations from Steward, which recently informed MPT that its “liquidity has been negatively impacted by significant changes to vendors’ payment terms,” the company said.

MPT has hired Alvarez & Marsal Securities LLC as its financial adviser to assist it on its options to recover the rent.

MPT said it agreed to fund a new $60 million bridge loan that is “secured by all MPT’s existing collateral” plus new second liens on Steward’s managed-care business, subordinate only to Steward’s asset-based lenders.

Meanwhile, KeyBanc downgraded MPT to sector weight from overweight due to “uncertainty and ongoing risks” to its tenant health that “remain an overhang.”

“Management is pursuing steps to improve its balance sheet, which we view favorably, but pricing and execution remain uncertain,” KeyBanc said.

Visibility into the company’s earnings trajectory “remains low and we are moving to the sidelines until there is better clarity,” KeyBanc said.

Prior to Friday’s moves, Medical Properties Trust’s stock had fallen 59.6% in the past year, compared with a 23% rise by the S&P 500
SPX.

Tomi Kilgore contributed.