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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 24, 1999
ElderTrust
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Maryland 001-13807 23-2932973
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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101 East State Street, Suite 100, Kennett Square, Pennsylvania 19348
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(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 925-4200
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On November 24, 1999, ElderTrust announced that it had adopted
a new dividend policy. The policy, which is subject to completion of the
tentative agreement with German American Capital Corp. to extend the Bank Credit
Facility from January 1, 2000 to June 30, 2001, will take effect with the
dividend to be declared in January 2000 for the quarter ending December 31,
1999. This new policy reflects the expected decrease in cash available for
distribution resulting from the increased interest costs and principal
amortization on the Company's new debt obligations. The new dividend policy
anticipates the dividend will be $1.20 per year, or $0.30 per quarter, per
common share outstanding.
On November 24, 1999, the Company also announced that it had
successfully completed new mortgage financing of $30 million secured by four
existing properties. One of the loans is secured by two properties. The new
mortgage debt has a three-year term and a variable interest rate based on
one-month LIBOR. Approximately $28 million of the total debt was used to reduce
the Company's outstanding Bank Credit Facility to a current balance of
approximately $40 million. The remaining funds were used to cover
transaction-related expenses and escrow requirements.
In addition, the Company announced that it had reinstituted
its share buyback program on a limited basis. The Company's Board of Trustees
authorized the repurchase of up to $500,000 of the Company's common shares from
time to time in open market purchases or privately-negotiated transactions.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
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99.1 Company press release of November 24, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELDERTRUST
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(Registrant)
/s/ D. Lee McCreary, Jr.
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D. Lee McCreary, Jr.
President and Chief Executive Officer
Date: December 7, 1999
3.
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EHIBIT 99.1
ElderTrust
A Healthcare Real Estate 101 East State Street
Investment Trust Suite 100
Kennett Square, PA 19348
T 888.234.REIT
T 610.925.4200
F 610.925.4351
Contact: D. Lee McCreary, Jr.
President and Chief Executive Officer
(610) 925-4200
www.eldertrust.com
ElderTrust Announces New Dividend Policy
Announces Completion of $30 Million Financing
and Reinstitutes Share Buyback Program on a Limited Basis
Kennett Square, PA, (November 24, 1999) - ElderTrust (NYSE:ETT), an equity
healthcare REIT, today announced its new dividend policy. The policy, which is
subject to completion of the tentative agreement to extend the Bank Credit
Facility, will take effect with the dividend to be declared in January 2000 for
the quarter ending December 31, 1999. This new policy reflects the expected
decrease in cash available for distribution resulting from the increased
interest costs and principal amortization on the Company's new debt obligations.
Under the new dividend policy, it is anticipated that the dividend will be $1.20
per year, or $0.30 per quarter, per common share outstanding.
The Company also announced that it has successfully completed new mortgage
financing of $30 million secured by four existing properties. One of the loans
is secured by two properties. The new mortgage debt, arranged by J.P. Morgan,
has a three-year term and a variable interest rate based on one-month LIBOR.
Approximately $28 million of the total debt has been used to reduce the
Company's outstanding Bank Credit Facility to a current balance of approximately
$40 million. The remaining funds were used to cover transaction-related expenses
and escrow requirements.
In addition, the Company announced it had reinstituted its share buyback program
on a limited basis. The Company reported that its Board of Trustees had
authorized the repurchase of up to $500,000 of the Company's common shares from
time to time in open market purchases or privately-negotiated transactions.
D. Lee McCreary, Jr., President & Chief Executive Officer said, "Our recent
refinancing efforts have significantly increased our debt service costs. As a
result, we have adopted a policy that our dividend should not exceed that amount
the Company can distribute from current operating cash flow after taking into
account debt service and other cash obligations. Although we can provide no
assurance as to the permanence of this new dividend level, this dividend was set
by the Board of Trustees at an amount the Company believes can be sustained over
the longer-term without further downward adjustment."
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Mr. McCreary continued, "The successful completion of the $30 million of
additional refinancing is a key component of our plan to resolve the line of
credit issue. Our next step is to finalize the previously announced tentative
agreement with German American Capital Corp., an agreement that would extend the
line term to June 30, 2001. We hope to finalize that agreement within the next
few weeks, although we can give no assurance that the extension of the Bank
Credit Facility will be completed within such time frame or at all.
Implementation of the above-noted dividend policy is dependent upon successful
completion of this extension agreement."
Additional details on the refinancing are as follows:
J.P. Morgan Mortgages:
Loan amount: $30 million
Interest rate:
Base rate 30-day LIBOR
Spread 300 basis points,
variable rate
instrument, hedge contract required.
Term: 3 years, one two-year extension available at
borrower's option.
Fees: 100 basis points, 50 basis points for
extension.
Principal amortization: None
ElderTrust is a real estate investment trust that invests in
real estate properties used in the healthcare services industry, principally
along the East Coast of the United States. Since commencing operations in
January 1998, the Company has acquired direct and indirect interests in 31
buildings and has loans outstanding of $49 million in construction and term
financing on eight additional healthcare facilities.
Certain matters discussed within this press release may be deemed to be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although ElderTrust believes the expectations
reflected in such forward-looking statements are reasonable assumptions, it can
give no assurance that its expectations will be attained. Factors that could
cause actual results to differ materially from ElderTrust's expectations include
real estate conditions, the Company's ability to extend or refinance its
existing bank credit facility, changes in the economic conditions and other
risks detailed from time to time in the Company's SEC reports and filings. The
Company assumes no obligation to update or supplement forward-looking statements
that become untrue because of subsequent events.
For more information on ElderTrust via fax at no charge,
please dial 1-800-PRO-INFO and enter ticker symbol ETT,
or visit ElderTrust's Web site at www.eldertrust.com
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