National Healthcare Properties, Inc.NHP
National Healthcare Properties, Inc. Debt Disclosure
Credit Facilities
The Company had the following credit facilities outstanding as of December 31, 2024 and 2023:
| Outstanding Facility Amount as of December 31, | Effective Interest Rate as of December 31,(6) | ||||||||||||||||||||||||||||||||||||||||||||||
| Credit Facility | Encumbered Properties (1) | 2024 | 2023 | 2024 | 2023 | Interest Rate | Maturity | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
| Fannie Mae Master Credit Facilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Capital One Facility | 11 | (2) | $ | 203,405 | $ | 206,944 | 7.19 | % | 7.86 | % | Variable | (6) | Nov. 2026 | ||||||||||||||||||||||||||||||||||
| KeyBank Facility | 10 | (3) | 137,103 | 139,334 | 7.24 | % | 7.91 | % | Variable | (6) | Nov. 2026 | ||||||||||||||||||||||||||||||||||||
| Total Fannie Mae Master Credit Facilities | 21 | $ | 340,508 | $ | 346,278 | ||||||||||||||||||||||||||||||||||||||||||
| Other Facilities: | |||||||||||||||||||||||||||||||||||||||||||||||
OMF Warehouse Facility | 7 | (4) | 21,708 | 14,748 | 7.55 | % | 8.36 | % | Variable | (6) | Dec. 2026 | ||||||||||||||||||||||||||||||||||||
| Total Credit Facilities | 28 | $ | 362,216 | $ | 361,026 | 7.23 | % | (5) | 7.90 | % | (5) | ||||||||||||||||||||||||||||||||||||
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(1)Encumbered properties are as of December 31, 2024.
(2)Secured by first-priority mortgages on 11 of the Company’s SHOPs as of December 31, 2024 with an aggregate carrying value of $354.1 million.
(3)Secured by first-priority mortgages on 10 of the Company’s SHOPs as of December 31, 2024 with an aggregate carrying value of $264.9 million.
(4)Secured by first-priority mortgages on seven of the Company’s OMFs as of December 31, 2024 with an aggregate carrying value of $32.6 million.
(5)Calculated on a weighted average basis for all credit facilities outstanding as of December 31, 2024 and 2023, respectively.
(6)The effective rates above only include the impact of designated hedging instruments. The Company also has eight active non-designated interest rate cap agreements with an aggregate notional amount of $369.2 million which limits 30-day SOFR to 3.50%. The Company did not designate these derivatives as hedges and accordingly, the changes in value and any cash received from these derivatives are presented within gain (loss) on derivative instruments on the consolidated statements of operations and comprehensive loss (see discussion below and Note 7 — Derivatives and Hedging Activities for additional details). Inclusive of the impact of these non-designated derivatives, the economic interest rates on the Capital One Fannie Mae Facility, KeyBank Fannie Mae Facility and OMF Warehouse Facility were 5.89%, 5.93% and 6.50%, respectively, as of December 31, 2024 and 5.89%, 5.95% and 6.50%, respectively, as of December 31, 2023
As of December 31, 2024, the carrying value of the Company’s real estate investments, at cost was $2.5 billion, with $1.3 billion of this amount pledged as collateral for mortgage notes payable, $619.0 million of this amount pledged to secure advances under the Fannie Mae Master Credit Facilities and $32.6 million of this amount pledged to secure advances under the OMF Warehouse Facility. All of the real estate assets pledged to secure debt or comprising the borrowing base of the relevant facilities are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with such real estate assets is satisfied or the asset is removed from the borrowing base of the relevant facilities, which would impact availability thereunder.
Unencumbered real estate investments, at cost as of December 31, 2024 was $533.1 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these unencumbered assets as collateral for mortgage loans, adding them to the borrowing base of the Fannie Mae Master Credit Facilities or OMF Warehouse Facility, or other future financings.
Prior Credit Facility
The Company’s prior credit facility (the “Prior Credit Facility”) consisted of two components, a revolving credit facility and a term loan, which were interest-only and would have matured on March 13, 2024. The Prior Credit Facility was fully repaid in May 2023 with net proceeds provided by the Barclays OMF Loan (see Note 4 — Mortgage Notes Payable, Net for details) and the Prior Credit Facility was terminated. At termination, the Company wrote off the remaining deferred financing costs associated with the Prior Credit Facility of $2.6 million, which is included in interest expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.
Fannie Mae Master Credit Facilities
On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Facility” and, together with the KeyBank Facility, the “Fannie Mae Master Credit Facilities”). Advances made under these agreements were assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program.
As of December 31, 2024, $340.5 million was outstanding under the Fannie Mae Master Credit Facilities. The Company may request future advances under the Fannie Mae Master Credit Facilities by adding eligible properties to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Until June 30, 2023, borrowings under the Fannie Mae Master Credit Facilities bore annual interest at a rate that varied on a monthly basis and was equal to the sum of the current LIBOR for one month U.S. dollar-denominated deposits and a spread (2.41% and 2.46% for the Capital One Facility and the KeyBank Facility, respectively). Effective July 1, 2023, the Fannie Mae Master Credit Facilities automatically transitioned to SOFR-based borrowings with monthly interest equal to the sum of the current SOFR for one-month denominated deposits and a spread of (2.41% and 2.46% for the Capital One Facility and the KeyBank Facility, respectively). The Fannie Mae Master Credit Facilities mature on November 1, 2026.
In the year ended December 31, 2023, the Company provided cash deposits totaling $11.8 million to Fannie Mae because the debt service coverage ratios of the underlying properties of each facility were below the minimum required amounts per the debt agreements. The Company provided an additional deposit of $0.3 million during the year December 31, 2024, bringing the total deposits to $12.1 million as of December 31, 2024. These deposits are recorded as restricted cash on the Company’s consolidated balance sheet and are pledged as additional collateral for the Fannie Mae Master Credit Facilities. This deposit will be refunded upon the earlier of the Company’s achievement of a debt service coverage ratio above the minimum required amount of 1.40 or the maturity of the Fannie Mae Master Credit Facilities.
OMF Warehouse Facility
On December 22, 2023, the Company, through wholly-owned subsidiaries of the OP, entered into a loan agreement with Capital One (the “OMF Warehouse Facility”) to provide up to $50.0 million of variable-rate financing.
As of December 31, 2024, $21.7 million was outstanding under the OMF Warehouse Facility. The Company may request future advances under the OMF Warehouse Facility by adding eligible OMFs to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Borrowings under the OMF Warehouse Facility bear interest at a monthly rate equal to the sum of the current SOFR for one-month denominated deposits and a spread of 3.0%. Interest payments are due monthly, with no principal payments due until maturity in December 2026.
Non-Designated Interest Rate Caps
As of December 31, 2024, the Company had eight SOFR-based interest rate cap agreements with an aggregate current effective notional amount of $369.2 million which caps SOFR at 3.50% with terms through January 2027. The Company does not apply hedge accounting to these agreements and changes in value as well as any cash received are presented within (loss) gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss. See Note 7 — Derivatives and Hedging Activities for additional information regarding the Company’s derivatives.
In connection with the Fannie Mae Master Credit Facilities, the Company was required to enter into interest rate cap agreements, which the Company periodically renews upon their expiration. During the year ended December 31, 2024, the Company paid total premiums of $1.5 million to renew one interest rate cap with an aggregate notional amount of $58.1 million which matured during the year ended December 31, 2024. The Company also paid a premium of $0.3 million for a new interest rate cap with a notional amount of $7.0 million which matures in January 2027.
Future Principal Payments
The following table summarizes the scheduled aggregate principal payments for the five years subsequent to December 31, 2024 and thereafter, on all of the Company’s outstanding debt (mortgage notes payable and credit facilities):
| Future Principal Payments | ||||||||||||||||||||
| (In thousands) | Mortgage Notes Payable | Credit Facilities | Total | |||||||||||||||||
2025 | $ | 865 | $ | 5,769 | $ | 6,634 | ||||||||||||||
| 2026 | 364,850 | 356,447 | 721,297 | |||||||||||||||||
| 2027 | 922 | — | 922 | |||||||||||||||||
| 2028 | 116,989 | — | 116,989 | |||||||||||||||||
| 2029 | 982 | — | 982 | |||||||||||||||||
| Thereafter | 305,039 | — | 305,039 | |||||||||||||||||
| Total | $ | 789,647 | $ | 362,216 | $ | 1,151,863 | ||||||||||||||
The Company’s existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of its operating and administrative expenses, debt service obligations (including principal repayment), the repayment of the Promissory Note (which was repaid in full in January 2025) and distributions to holders of its Series A Preferred Stock and Series B Preferred Stock. The Company closely monitors its current and anticipated liquidity position relative to its current and anticipated demands for cash and believes that it has sufficient current liquidity to meet its financial obligations for at least the next twelve months. The Company expects to fund its future short-term operating liquidity requirements, including distributions to holders of Series A Preferred Stock and Series B Preferred Stock, through a combination of current cash on hand, net cash provided by its operating activities, potential future advances under its Fannie Mae Master Credit Facilities and OMF Warehouse Facility, net cash provided by its property dispositions and potential new financings utilizing certain of its currently unencumbered properties.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.