The stock of Brookdale Senior Living Inc. (BKD) gained in the pre-market after the company announced in a press release that they have completed the $100 million refinancing as well as prepaid substantially all the remaining debt maturities of 2022. The stock was valued at $5.00 in the pre-market at the time of this writing gaining more than 5.93% from the previously closed value. At the end of the last trading session, the stock was valued at $4.72. The volume of the stock traded in the last trading session was around 2.83 million shares.
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Reason for the BKD stock gain
Brookdale Senior Living Inc. (BKD) on 21st December 2021, announced in a press release that they have completed the $100 million refinancing as well as prepaid substantially all the remaining debt maturities of 2022. With this prepaying of the debt, it will save millions of dollars in the expense of annual debt interest.
The Brookdale Senior Living Inc. (BKD) has obtained $100 million of mortgage debt from Capital One on 21st December 2021, National Association. In securing the loan, CBRE Capital Markets played a role as financial advisor to Brookdale. The debt has a starting three-year term and two renewal options of the one-year, exercisable subject to certain performance criteria. The debt is interest-only for the first three years and is lower-leverage, having a variable interest rate of 2.15% over SOFR. The non-recourse of first priority mortgages were secured by 11 senior living communities, which in first quarter of 2022 had lastly secured Fannie Mae loans of $143 million.
Effect on the stock
This a positive initiative by Brookdale Senior Living Inc. (BKD) which depicts that the company is doing well and is capable enough to pay off its debt. The investors are responding positively to this major development and are taking an interest to invest in its stock. This could result in high capital gains for the investors in the future.
Conclusion
This decision by Brookdale Senior Living Inc. (BKD) shows that the company has a strong balance sheet and is profitable. This will make the company save millions of dollars in the expense of the interest of the debt.
