ElderTrust Addresses Loan Maturities.Business Editors/Health/Medical Writers WILMINGTON, Del.--(BUSINESS WIRE)--Nov. 27, 2002 ElderTrust (NYSE NYSE See: New York Stock Exchange :ETT ETT Empresa de Trabajo Temporal (Spain) ETT European Transactions on Telecommunications ETT Exercise Treadmill Test ETT Embedded Training Team ETT Exercise Tolerance Test (cardiology) ), an equity healthcare REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). , today issued guidance with respect to its maturing loans. The Company has three loans totaling $30 million that mature on December 1, 2002. Under the loan terms, the maturity date can, at the borrower's request and subject to certain other conditions, be extended for one two-year period. The Company had previously announced that it had requested extensions for all three loans. In today's announcement the Company stated that one loan with an outstanding balance of approximately $10.5 million has been extended to December 1, 2004. This loan is secured by the Lopatcong property. In addition, the Company stated that it has reached an agreement with the loan administrator to extend to January 10, 2003 the maturity date of one loan totaling approximately $14.9 million, which is secured by the Harston and Pennsburg properties, and one loan totaling approximately $4.6 million, which is secured by the Wayne property. The Company noted that the longer term extensions had not been granted for these two loans as operating levels have declined since the loans were originated. The Company is currently negotiating a resolution to this situation. In that process the Company hopes to resolve the Wayne loan by paying down the balance outstanding to an acceptable level and extending that loan for an additional two-year period. Resolution of the Harston/Pennsburg loan is still under discussion. A resolution of this loan may include, among other alternatives, a further extension as a cash flow mortgage, sale or a title transfer via a "deed in lieu of foreclosure A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e., the borrower) conveys all interest in a real property to the mortgagee (i.e., the lender) to satisfy a loan that is in default and avoid foreclosure proceedings. " transaction. Finally, the Company noted that the Harston and Pennsburg properties contributed approximately $0.3 million in Funds From Operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) for the quarter ended September 30, 2002 or approximately $0.035 per fully diluted share. This represents $0.5 million in rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time less $0.2 million of interest expense on $14.9 million of related debt. The Wayne property contributed approximately $0.1 million in FFO for the quarter ended September 30, 2002 or approximately $0.015 per fully diluted share. This represents $0.2 million in rental income less $0.1 million of interest expense on $4.6 million of related debt. "Unfortunately, the properties securing the two loans under the short-term extension are not performing as well as when the loans were first initiated", said D. Lee McCreary, Jr., ElderTrust President and Chief Executive Officer. "Based upon our review we currently believe the Wayne property may be worth retaining. However, the Harston/Pennsburg package has declined dramatically and requires further review. We hope to reach a satisfactory conclusion to these issues within this shortened extension period." 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 The "Eastern Seaboard," or "Atlantic Seaboard" are terms referring to the easternmost coastal states in the United States. They touch the Atlantic Ocean and stretch up to Canada. . Since commencing operations in January 1998, the Company has acquired 32 properties. Certain matters discussed within this press release may be deemed to be forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 the extent to which Genesis Health Ventures, Inc., the Company's principal tenant, continues to make lease payments to the Company, the Company's ability to extend or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. mortgage loans totaling approximately $30 million that mature on December 1, 2002, real estate conditions, 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 visit ElderTrust's Web site at www.eldertrust.com |
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