LOS ANGELES, January 9, 2024 -- B. Riley Securities, Inc. ("B. Riley"), a leading middle market investment bank and subsidiary of B. Riley Financial, Inc. (Nasdaq: RILY), is pleased to have served as lead left bookrunner to Diversified Healthcare Trust (Nasdaq: DHC) in its $941 million zero coupon senior secured notes offering.
Diversified Healthcare Trust (DHC) intends to use proceeds from the transaction to repay all of its outstanding debt maturing in 2024, and for general business purposes. In connection with this transaction and the repayment of these outstanding debts, DHC will immediately regain compliance with the incurrence covenants under its remaining public debt agreements. Read more about the transaction here.
DHC is one of the leading owners of U.S. real estate focused on healthcare and life sciences. It owns assets with an approximate gross book value of $7.2 billion including over 370 properties in 36 states. Its properties range from multi-specialty physician offices, to more than 250 senior living communities, to multi-building life science campuses. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with approximately $36 billion in assets under management as of September 30, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. To learn more about DHC, visit www.dhcreit.com.
"We appreciate the trust DHC placed with B. Riley and are proud to have executed on this critical engagement," said Patrice McNicoll, Co-Head of Investment Banking, B. Riley Securities. "This outcome is reflective of our multi-disciplined deal team that brought a differentiated approach, and we look forward to continuing our partnership with The RMR Group."
"Congratulations to the entire DHC team. It was a privilege to collaborate with them and create this timely, bespoke solve," said Jimmy Baker, President and Head of Capital Markets, B. Riley Securities. "We also appreciate the many lenders who constructively helped us deliver this solution that retired all 2024 maturities, bringing the company immediately back into compliance with debt incurrence covenants."
The sale of the notes generated approximately $750 million in gross proceeds and will accrete at a rate of 11.25% annually, compounded semi-annually. If the 12-month extension option is exercised, interest payments will be due semi-annually during the extension period at an initial interest rate of 11.25% with increases of 50 basis points every 90 days that the notes remain outstanding.
B. Riley's Investment Banking team was led by Patrice McNicoll, Larry Goldsmith and Brian Taylor and included Perry Mandarino, Mason Boh, Connor Boyle and Mickey Sacks.
B. Riley's Capital Markets team was led by Jimmy Baker and Chad Ritchie and included Ryan Aceto, Dawn Farrell, Kathy Innis and Samuel Cook.
The notes have not and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), any state securities laws or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The new notes were offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and outside the United States only to non-U.S. investors in compliance with Regulation S under the Securities Act.
About B. Riley Securities
B. Riley has served as a preeminent fixture in middle market brokerage and investment banking for over 25 years. We provide a full suite of investment banking and capital markets services to companies, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and recapitalization. Widely recognized for our thematic proprietary equity research, clients benefit from B. Riley's extensive network, industry expertise, and proven execution capabilities of our end-to-end financial services platform. B. Riley Securities is a subsidiary of B. Riley Financial (Nasdaq: RILY). For more information, visit www.brileysecurities.com.
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