The Ensign Group, Inc. (NASDAQ:ENSG) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On December 27, 2017, The Ensign Group, Inc. (Ensign or the Company) announced that it recently completed a $112 million portfolio financing with low, fixed-rate loans amortized over 30- or 35-year terms and secured by mortgages on seventeen properties owned by Ensign subsidiaries. Amounts borrowed under the mortgage loans may be prepaid, subject to prepayment fees of the principal balance on the date of prepayment. During the first three years, the prepayment fee is 10% and is reduced by 3% in the fourth year of the loan, and reduced by 1% per year for years five through ten of the loan. There is no prepayment penalty after year ten. The borrowings were arranged by Lancaster Pollard Mortgage Company, LLC, and insured by the Department of Housing and Urban Development (HUD). Loan proceeds will be primarily deployed to pay down previously drawn amounts on Ensign's revolving line of credit. In addition to refinancing existing borrowings, the proceeds of the HUD-insured debt will be used to fund acquisitions, to renovate and upgrade existing and future facilities, to cover working capital needs and for other business purposes.
The foregoing description of the HUD insured loan portfolio is qualified in its entirety by reference to the form of U.S. Department of Housing and Urban Development Healthcare Facility Note, which includes a schedule of individual loans to certain of the Company’s subsidiaries under the financing program, and the form of borrower security agreement under the program, which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated herein by reference.
Item 1.01. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosures of the U.S. Department of Housing and Urban Development portfolio financing, contained in Item 1.01 above are hereby incorporated into this Item 1.01 by reference.
Item 1.01. Financial Statements and Exhibits.
(d)Exhibits.
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Exhibit No. |
Description |
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Form of U.S. Department of Housing and Urban Development Healthcare Facility Note and schedule of individual subsidiary loans, by and among The Ensign Group, Inc.'s subsidiaries listed therein and U.S. Department of Housing and Urban Development. |
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Form of U.S. Department of Housing and Urban Development Security Instrument/Mortgage/Deed of Trust |
ENSIGN GROUP, INC ExhibitEX-10.1 2 exhibit101hudnote.htm EXHIBIT 10.1 Exhibit EXHIBIT 10.1FORM OF HUD HEALTHCARE FACILITY NOTEAND SCHEDULE OF INDIVIDUAL LOANSHealthcare Facility NoteSection 232U.S. Department of Housing and Urban DevelopmentOffice of Residential Care FacilitiesOMB Approval No. 2502-0605(exp. 06/30/2017)Public reporting burden for this collection of information is estimated to average 1 hour. This includes the time for collecting,…To view the full exhibit click here
About The Ensign Group, Inc. (NASDAQ:ENSG)
The Ensign Group, Inc. is a holding company. The Company, through its subsidiaries, provides healthcare services across the post-acute care continuum, as well as urgent care centers and mobile ancillary businesses. Its segments include transitional, skilled and assisted living services (TSA services); home health and hospice services, and all other. The TSA services segment includes the operation of skilled nursing facilities and assisted and independent living facilities. The home health and hospice services segment includes the Company’s home health, home care and hospice businesses. The all other segment includes the Company’s urgent care centers and mobile ancillary operations. The Company operates a portfolio to approximately 207 healthcare facilities, over 35 of which are owned, approximately 16 hospice agencies, over 16 home health agencies, approximately three home care businesses and over 17 urgent care clinics across approximately 14 states.
