On February 23, 2023, Sabra Health Care REIT, Inc. (the “Company”) entered into an equity distribution agreement (the “Distribution Agreement”) with (i) Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Fifth Third Securities, Inc., JMP Securities LLC, KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC, Regions Securities LLC, Robert W. Baird & Co. Incorporated, Scotia Capital (USA) Inc., Siebert Williams Shank & Co., LLC, Truist Securities, Inc. and Wells Fargo Securities, LLC (individually, a “Sales Agent” and collectively, the “Sales Agents”) and (ii) Barclays Bank PLC, Bank of Montreal, Bank of America, N.A., Citibank, N.A., Crédit Agricole Corporate and Investment Bank, KeyBanc Capital Markets Inc., Mizuho Markets Americas LLC, Morgan Stanley & Co. LLC, Raymond James & Associates, Inc., Regions Securities LLC, Royal Bank of Canada, The Bank of Nova Scotia, Truist Bank and Wells Fargo Bank, National Association or their respective affiliates, each as forward purchaser (in such capacity, each a “Forward Purchaser”, and collectively, the “Forward Purchasers”) relating to (a) the issuance and sale by the Company to or through the Sales Agents from time to time of shares (the “Issuance Shares”) of the Company’s common stock, $0.01 par value per share (“Common Stock”), and (b) the sale by the Forward Sellers (as defined below), acting as agents for the Forward Purchasers or their affiliates, of Common Stock (the “Forward Shares,” and together with the Issuance Shares, the “Shares”), with the Shares to be sold under the Distribution Agreement having an aggregate gross offering price of up to $500,000,000 (the “ATM Program”). The Sales Agents, when acting in their capacity as agents for the Forward Purchasers, are referred to herein individually as a “Forward Seller” and, collectively, as the “Forward Sellers.”
Pursuant to the terms of the Distribution Agreement, the Company may enter into one or more forward sale agreements with one or more of the Forward Purchasers. In connection with any forward sale agreement, the relevant Forward Purchaser will use commercially reasonable efforts, consistent with its normal trading and sales practices for similar transactions and applicable law and regulation, to borrow from third parties and, through its affiliated Forward Seller, sell a number of Shares equal to the number of shares of Common Stock specified in such forward sale agreement.
Pursuant to the terms of the Distribution Agreement, the sales, if any, of the Issuance Shares will be made through the Sales Agents acting as sales agent for the Company or directly to the Sales Agents acting as principals. The sales, if any, of the Forward Shares will be made through Forward Sellers, acting as agents for the applicable Forward Purchasers. The Shares may be sold by any method permitted by law deemed to be an “at-the-market” offering, including, without limitation, sales made directly on the Nasdaq Global Select Market, on any other primary trading market for the Company’s Common Stock or to or through a market maker (which may include block transactions). In addition, with the Company’s prior consent, the Sales Agents may also sell the Shares in privately negotiated transactions.
The aggregate compensation to the Sales Agents, acting as sales agents on our behalf, for sales of the Issuance Shares or otherwise under the Distribution Agreement will be up to $5,000,000. The actual compensation will vary based on the amount of gross proceeds from the sales of shares of the Common Stock pursuant to the Distribution Agreement. The Distribution Agreement also provides that a Forward Purchaser will be entitled to commissions at a mutually agreed rate that will not exceed 1.5% of the volume-weighted average price at which its affiliated Forward Seller sells Forward Shares during the forward hedge selling period applicable to a forward sale agreement, which commissions will be in the form of a reduced initial forward sale price under the related forward sale agreement.
The offering of Shares pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of the maximum aggregate amount of the Shares subject to the Distribution Agreement and (ii) the termination of the Distribution Agreement as permitted therein. The offering of Shares pursuant to the Distribution Agreement may also be suspended as permitted therein.
The Company intends to contribute the net proceeds (i) from sales of shares of its Common Stock to or through the Sales Agents and (ii) upon settlement of any forward sale agreement, in each case, to Sabra Health Care Limited Partnership (the “Operating Partnership”), which in turn intends to use the net proceeds to repay indebtedness, to fund possible future investments and/or for general corporate purposes.
