Prospect Medical Holdings’ $1.55 Billion Sale-Leaseback and Financing

Ropes & Gray represented Prospect Medical Holdings, Inc. in signing a sale-leaseback / financing transaction with Medical Properties Trust, Inc.

Prospect Medical Holdings, a growing healthcare services company, offers a unique and innovative healthcare delivery model, known as Coordinated Regional Care, which emphasizes coordination of care and population health management, with an emphasis on preventive care.

Medical Properties Trust is a self-advised real estate investment trust formed to acquire and develop net-leased hospital facilities. Medical Properties Trust, Inc. is related to Prospect’s real estate assets located in California, Pennsylvania and Connecticut.

The transaction was structured using corporate level unsecured debt, property-level mortgage financing, and both operating and failed sale leasebacks, providing approximately $1.55 billion in proceeds to Prospect.

Prospect will use the funds to retire the company’s existing term-loan debt.

Prospect will continue to own and operate all its hospitals and ancillary operations in California, Connecticut, Pennsylvania, Texas and New Jersey as well as its Rhode Island joint venture.

The Ropes & Gray team was led by real estate partners Walter McCabe (Picture) and Alison George (both of Boston). It included health care partner John Chesley (San Francisco), environmental partner Peter Alpert (Boston), finance partner Kevin Jarboe (Boston) litigation & enforcement partners Peter Welsh (Boston) and Martin Crisp (New York), private equity partner Eric Issadore (San Francisco), tax partners Ben Rogers (Boston) and Adam Greenwood (New York), real estate counsel Owen LaFreniere (New York) and real estate associate Thomas Wechsler (New York).

Involved fees earner: Peter Alpert – Ropes & Gray; John Chesley – Ropes & Gray; Martin Crisp – Ropes & Gray; Alison George – Ropes & Gray; Adam Greenwood – Ropes & Gray; Eric Issadore – Ropes & Gray; Kevin Jarboe – Ropes & Gray; Owen LaFreniere – Ropes & Gray; Walter McCabe – Ropes & Gray; Benjamin Rogers – Ropes & Gray; Thomas Wechsler – Ropes & Gray; Peter Welsh – Ropes & Gray;

Law Firms: Ropes & Gray;

Clients: Prospect Medical Holdings, Inc.;