CapitalSource of Chevy Chase, Md., said Tuesday that it has raised $119 million by mortgaging some of the long-term-care properties it previously agreed to sell to Omega Healthcare Investors.
The mortgage financing is guaranteed by the Department of Housing and Urban Development. CapitalSource, which did not identify the mortgage lender, said it used the proceeds from the financing to reduce debt and add liquidity at the parent company level.
When Omega takes over the properties, it would assume the debt and CapitalSource would keep the cash.
The $14 billion-asset CapitalSource, whose main businesses are banking and commercial finance, is cashing out of its portfolio of 180 health care properties.
CapitalSource agreed in November to sell 143 of these properties to Omega for $331 million of cash and Omega stock. The deal is closing in phases.
The first 40 properties were sold this month. Another 40 (including the ones CapitalSource mortgaged) are to be sold by April 1, and the other 63 are to be sold by the end of next year.
CapitalSource's remaining 37 properties were sold last month to an unidentified buyer for $100 million cash.