Medical Properties Trust tenant Steward files for bankruptcy protection

By Steve Goldstein

Struggling hospital chain Steward Health Care, a tenant of publicly traded Medical Properties Trust, filed for bankruptcy protection on Monday.

Steward, the largest physician-owned system in the U.S., said it's finalizing the terms of debtor-in-possession financing from Medical Properties Trust for initial funding of $75 million, and up to an additional $225 million.

Medical Properties Trust (MPW) fell 8% in early trade.

Steward blamed the bankruptcy on the delay in closing the sale of its Stewardship Health business, as well as decreasing reimbursement rates and skyrocketing labor costs. UnitedHealth's (UNH) Optum has agreed to buy primary-care facilities in nine states, a deal that U.S. Sens. Elizabeth Warren and Ed Markey, both Massachusetts Democrats, have opposed.

The concern over Steward's situation and its difficulty in paying rent has dogged the company, whose stock was down 56% from its July highs but up 50% from its January lows.

The bond-market reaction, reflecting the long-known concerns over Steward's finances, was modest. Medical Properties Trust's debt maturing in 2031 has fallen between 1.5 cents and 2 cents on the dollar over the last two weeks, according to information from the market-data company BondCliQ.

The Wall Street Journal reported that one Steward hospital in Florida became infested with bats, and garbage collectors cut off another in the state over unpaid bills. Steward operates 30 hospitals in eight states.

Medical Properties Trust is due to report first-quarter results on Thursday.

-Steve Goldstein

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05-06-24 0949ET

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