MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.  Entry into a Material Definitive Agreement.

On April 27, 2017, MedEquities Realty Trust, Inc. (the “Company”) through its wholly owned subsidiaries, as landlord, entered into an amended and restated master lease agreement (the “Master Lease”) with Nashville Leasehold Interests, LLC (the “Tenant”), which is a wholly owned subsidiary of THI of Baltimore, Inc. (“THI of Baltimore”), a wholly owned subsidiary of Fundamental Healthcare. The Master Lease, which is effective as of March 20, 2017, amended, restated and consolidated the prior leases for the Company’s four facilities (the “Facilities”) that were leased to wholly owned subsidiaries of THI of Baltimore (the “Existing Operators”): (i) Mountain’s Edge Hospital, an acute care hospital located in Las Vegas, Nevada; (ii) Horizon Specialty Hospital of Henderson (“Horizon Hospital”), a long-term acute care hospital located in Las Vegas, Nevada; (iii) Physical Rehabilitation and Wellness Center of Spartanburg (formerly known as Magnolia Place of Spartanburg), a skilled nursing facility located in Spartanburg, South Carolina (the “Spartanburg Facility”); and (iv) Mira Vista Court, a skilled nursing facility located in Fort Worth, Texas. Under the Master Lease, the Tenant is responsible for all costs of the Facilities, including taxes, utilities, insurance, maintenance and capital improvements.

Under the Master Lease, the leases for Mountain’s Edge Hospital and Horizon Hospital have initial terms of 15 years and the leases for the Spartanburg Facility and Mira Vista Court have initial terms of 12 years, each with two five-year renewal options, subject to certain terms and conditions. The aggregate annual rent under the Master Lease is approximately $8.5 million, payable in equal monthly installments. On the first three anniversaries of the initial lease term, the annual rent will increase by the lesser of 1.5% of the prior year’s annual rent and the percentage increase in the consumer price index over the prior 12 months. On each anniversary thereafter, the annual rent will increase by 2.0% of the prior year’s annual rent.

In addition, to the Master Lease, the Company agreed to provide up to $11.0 million to the Tenant to fund the construction and equipping of five surgical suites at Mountain’s Edge Hospital, subject to certain terms and conditions.  The annual rent under the Master Lease will increase proportionately each month based on the amount that the Company has funded to this commitment.

THI of Baltimore unconditionally guaranteed all obligations of the Tenant under the Master Lease, to the Master Lease Guaranty, dated April 27, 2017 (the “Guaranty”). In addition, the Master Lease is secured by a security interest in substantially all of the assets of the Existing Operators, subject to the terms of an intercreditor agreement between the Company and the Tenant’s existing secured lender.

The Master Lease contains customary representations and warranties and financial and other affirmative and negative covenants, including requirements to maintain certain minimum rent coverage ratios for each of the Facilities individually and in the aggregate and a minimum fixed charge coverage ratio for the Facilities in the aggregate. The Master Lease also includes customary events of default, in certain cases subject to customary cure periods.

About MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT)

MedEquities Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company invests primarily in real estate across the acute and post-acute spectrum of care. It focuses on investing in various types of healthcare properties, including acute care hospitals; skilled nursing facilities; short-stay surgical and specialty hospitals, which focus on orthopedic, heart and other dedicated surgeries and specialty procedures; dedicated specialty hospitals, such as inpatient rehabilitation facilities, long-term acute care hospitals and facilities providing psychiatric care; physician clinics; diagnostic facilities; outpatient surgery centers, and facilities that support these services, such as medical office buildings. As of September 30, 2016, the Company’s portfolio included 24 healthcare facilities and one healthcare-related debt investment.

MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) Recent Trading Information

MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) closed its last trading session down -0.07 at 11.92 with 122,754 shares trading hands.