O’Melveny assists Citibank with $150 million secured revolving credit facility

O’Melveny recently provided legal advice to Citibank, N.A. concerning a significant financial transaction involving a secured revolving credit facility worth US$150 million for Diversified Healthcare Trust. This transaction was disclosed on June 12. The credit facility, which has an initial term of four years, includes options for two six-month extensions under certain conditions. Interest on the facility is calculated based on the Secured Overnight Financing Rate (SOFR) plus a spread of 250 to 300 basis points, depending on Diversified Healthcare Trust’s (DHC) net leverage ratio. The credit facility is secured by 14 senior housing communities comprising 2,632 living units managed by Five Star Senior Living.

DHC is a real estate investment trust focused on acquiring high-quality healthcare properties across the United States. O’Melveny represented Citibank, N.A. in this transaction, with New York Real Estate partner Malcolm Montgomery leading the team, along with senior counsel Lance Levine and associate Britny Arianpour.

On June 12, Diversified Healthcare Trust announced the completion of a new secured revolving credit facility worth $150 million. This facility, backed by 14 senior housing communities managed by Five Star Senior Living, enhances DHC’s overall liquidity and supports its general business operations. The credit facility has an initial term of four years, with the potential for two six-month extensions, and is linked to SOFR with a spread of 250 to 300 basis points based on DHC’s net leverage ratio.

Matt Brown, DHC’s Chief Financial Officer and Treasurer, emphasized the positive impact of this credit facility on the company’s liquidity and financial flexibility, highlighting the high quality of DHC’s senior living assets as reflected in the average per unit valuation. Citibank, N.A. played a central role as the Administrative Agent, Lead Arranger, and Book Running Manager, with support from Bank of America, N.A., Morgan Stanley Bank, N.A., PNC Bank, National Association, and Royal Bank of Canada.

Diversified Healthcare Trust focuses on owning top-tier healthcare properties nationwide. By diversifying across various aspects of healthcare services, research disciplines, and property types, DHC aims to maintain a strong and balanced portfolio. As of March 31, 2025, DHC’s portfolio exceeded $6.8 billion, including 343 properties across 34 states and Washington, D.C., with over 26,000 senior living units and approximately 7.6 million square feet of medical and life science properties leased to around 450 tenants.

Forward-looking statements provided by DHC caution that future results may differ from current expectations due to various risks and uncertainties, many of which are beyond the company’s control. It emphasizes the importance of seeking information from SEC filings, which detail potential risk factors that could impact the company’s forward-looking statements.