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May 26, 2005
Mail Stop 0409
Edward K. Aldag, Jr.
Chairman, President, Chief Executive Officer and Secretary
Medical Properties Trust, Inc.
1000 Urban Center Drive, Suite 501
Birmingham, Alabama 35242
Re: Medical Properties Trust, Inc.
Amendment No. 3 to Registration Statement on Form S-11,
Filed
May 13, 2005
Registration No. 333-119957
Dear Mr. Aldag:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. We have reviewed your revisions in response to comment 37 from
our
last comment letter. In light of the fact that the "guarantors"
of
the Vibra loans are entities that "do not have substantial
assets",
it is unclear how these entities provide a guaranty, as the term
is
typically understood. Please revise your disclosure accordingly
since the plain meaning of such term would imply that the company
has
relevant recourse in the event of a default under the loan, which
does not appear to be the case. In addition, please
supplementally
advise us as to what future activities, if any, you anticipate the
Vibra entities will conduct that would render their guarantee of
this
loan more meaningful.
Summary
Other Letters of Commitment, page 5
2. It does not appear that any of the proposed transactions listed
under this heading represent commitments of the registrant. We
note,
for example, that DVH has no obligation to present you with a
development agreement, and absent such an agreement, you have no
obligation to provide development funds to DVH. In addition, with
respect to the two transactions with unidentified tenants, your
obligation to purchase the property is contingent upon the tenant
first entering into an agreement and subsequently purchasing such
properties. In the case of the second transaction, the tenant has
not even entered into a letter of intent to purchase the property.
In light of the preliminary nature of these proposed transactions
and
the fact that proceeds from the proposed offering will not be used
to
fund them, it is not appropriate to highlight them in the summary.
Please remove your description of these items from the summary.
3. In light of the substantial conditions in place with respect to
the "Letters of Commitment" described here and elsewhere in the
prospectus, please revise your disclosure throughout the
prospectus
to refer to these proposed transactions in a way that makes clear
that there is no "commitment" at this time to complete them.
Summary Risk Factors, page 7
4. Please include a summary risk factor regarding the underwriter
conflict of interest risk described on page 39.
The Offering, page 14
5. Please revise the use of proceeds bullet points to conform to
the
bullet points on page 41.
Risk Factors, page 16
6. We note your response to comment 10. However, it still may be
unclear to an investor that the risk factors disclose all known
material risks. Please revise accordingly.
We may not consummate the transactions contemplated by our other
letters of commitment, which could adversely affect our ability to
make distributions to our stockholders, page 18
7. Please disclose, if true, that DSI is not obligated to present
you
with a development agreement and, if that were to occur, you would
have no obligation to provide funding to DSI.
Our Portfolio, page 72
Vibra Facilities and Loans, page 73
8. Please disclose the fixed charge coverage ratio not complied
with
by Vibra.
Our Pending Acquisitions and Developments, page 83
9. We refer to the Bloomington, Indiana and Houston, Texas
transactions where the facilities will be operated by newly-formed
entities that have no significant operations to date. Please
describe how these entities will be able to run the facilities and
make rental payments to you.
Other Letters of Commitment, page 91
10. Please revise the date of your May 9th letter of commitment
referenced on page 93. In addition, please disclose the tenants
with
whom you executed letters of commitment on May 3, 2005 and May 9,
2005.
Selling Stockholders, page 108
11. Please advise us as to whether you expect to have information
regarding the selling securityholders in this offering prior to
the
printing of red herrings and circulation of a preliminary
prospectus.
We may have comments on your disclosure within this section.
Financial Statements and Notes
12. Update Vibra financial statements in your next amendment to
the
Registration Statements. Financial statements for the lessee
should
be included for the periods specified in Rules 3-01 and 3-02 of
Regulation S-X.
13. Refer to independent auditors` consent within exhibit 23.1.
Please have your auditors provide conforming signature in the
consent
within exhibit 23.1 in your next amendment to the Registration
Statement.
14. Refer to response to comment 3. We will await the inclusion
of
pro forma per share information in your next amendment to the
Registration Statement.
15. We have read and considered your response to comment 29. We
understand that you plan to exercise your purchase option to
acquire
Hammond facility within 12 months of January 2005. Explain to us
your
basis not to provide pro forma effects of the rental operations of
Hammond facility given it is a probable acquisition or revise to
include this information. If the acquisition is not probable you
should revise accordingly to only show the pro forma impact of the
loan and related interest.
16. We note on page 93 that you have entered into letters of
commitment with two tenants to purchase two hospital facilities in
California for $45.8 million. Explain to us why you did not
include
the pro forma effects of these probable acquisitions in the pro
forma
financial statements. If these acquisitions are not probable at
this
time, clearly state that and the basis for your determination.
17. We have reviewed your response to comment 37. Please provide
clarifying disclosure in your document to explain the basis for
the
financial statements you have presented. In this regard, you
should
explain why you believed financial statements of the lessee were
more
meaningful than the financial statements of the property and the
guarantors due to the lack of rental history and the lack of
substantive assets of the guarantors.
Tax Opinion
18. The second, third and sixth assumptions appear to relate to
future events that are beyond the scope of the opinion. The
opinion
with respect to "proposed operations" already appears to be
limited
to the operations as described in the registration statement, the
company representation letter and other documents as of the date
of
the opinion. Please revise or advise.
19. Please revise the fourth assumption to exclude the company
from
the definition of "Partner."
20. Please supplementally advise us why you are incorporating the
tax
section of the prospectus into the opinion.
21. Please revise opinion (a) to refer to the registration
statement,
rather than "as represented to us." Since investors do not have
access to the tax representation letter, such a reference may
obscure
the scope of the opinion. We note that it is appropriate for
counsel
to rely on your representations as to factual matters.
22. Please revise the penultimate paragraph to reflect that after-
market purchasers in the offering may rely on the opinion. The
current disclosure refers to "holders of the common stock."
Directed Share Program Materials
23. Please revise the materials to clarify that shares purchased
in
this program will be subject to lock-up restrictions. Refer to
page
153 of the prospectus.
Supplemental Materials
24. We note your supplemental response to comments 3 and 4 of our
letter dated November 24, 2004. However, it does not appear that
you
have provided supporting materials in response to comment 3. For
example, you have not provided supporting information for the
following data:
U.S. Department of Commerce and Department of Health and Human
Services data, page 9;
U.S. Department of Commerce data, page 58; and
CMS information, page 69 and 71.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Andrew Mew at (202) 551-3377 or Cicely
Luckey,
Accounting Branch Chief, at (202) 551-3413 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Michael McTiernan, Attorney-Advisor, at (202) 551-
3852, or me at (202) 551-3694 with any other questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: Thomas O. Kolb, Esq. (via facsimile)
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
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Medical Properties Trust, Inc.
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