HCR, which accounts for nearly all of Quality Care’s revenues, failed to make a full rent payment in June. It owes about $300 million in past rent, the landlord said in a regulatory filing. Moody’s downgraded Quality Care and put the rating on review given uncertainty surrounding its ability to reach an out-of-court restructuring deal with HCR.
Quality Care said it is asking lenders for a term loan of up to $400 million and a $100 million letter of credit to refinance current debt and provide working capital. The company said it hoped to have a commitment by tomorrow.
Private equity firm Carlyle Group bought HCR ManorCare in a 2007 leveraged buyout for $6.3 billion and sold the properties to HCP for $6.1 billion in 2010.