Operator
Thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Medical Properties Trust Fourth Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise during this 60-minute call. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, Press star 1 again. Thank you. I would now like to turn the call over to Charles Lambert, Senior Vice President. Please go ahead.
Thank you and good morning. Welcome to the MPT conference call. With me today are Edward K. Aldag, Jr., Stephen Hamner, Executive Vice President and Chief Financial Officer, Kevin Hanna, Rosa Williams, Senior Vice Distributed this morning and furnished on Form 8K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at mpt.com in the Investor Relations section. Additionally, statements that may be considered forward-looking statements within the meaning of the private securities litigation statements are subject to known and unknown risks, uncertainties, and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such. which refer you to the company's reports, should differ. Material provided today is as of this date only and except as required by the federal city does not undertake a duty to update any such information. In addition, it should be considered in addition to Please note that in our press release, Medical Properties Trust has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at mpt.com for the most directly comparable financial measures and related reconciliation.
Chief Executive Officer, in a few minutes to discuss the hospital strategic updates. Beginning with performance trends, total portfolio EBITDA coverage increased year-over-year to 2.6 times, particularly strong, but a $130 million EBITDA increase versus the same quarter last year. For the second consecutive quarter, post-acute care operators reported a $50 million EBITDA increase year-over-year, led by a 15% improvement at Earnest Health, a 28% improvement at Vibra, and an 8% increase at Median. Finally, our behavioral health portfolio was down slightly year-over-year, driven by certain volume headwinds in the U.K. market and labor cost pressures in the U.S., which Rosa will elaborate on shortly. During the quarter, we continued to take decisive steps to strengthen our portfolio. Given the strong performance of its post-acute facilities over the past few quarters, we are pleased to enter into a new 20-year master lease agreement with Vibra. We capitalized on an opportunity to acquire a high-performing post-acute facility in California for approximately $32 million with a strong cap rate and acquired a new post-3 million euros. We also continue to identify opportunities within the portfolio to achieve attractive returns and allocation flexibility moving forward during the quarter. Before turning it over to Rosa, I also want to acknowledge that 2025 marked our 20th anniversary as a publicly traded company. Throughout the past two decades, we have been guided by the same core principles, providing hospital operators with capital solutions that allow them to focus on patient care, acquiring high-value real estate to deliver attractive returns for our shareholders, and supporting the communities we serve around the world. These principles have stayed true as we've navigated periods of significant opportunities and challenges, and they continue to shape the strength of our business today. We are entering our third decade as a public company with strong conviction in our business model and a clear focus on strengthening our platform for the long term. We recently unveiled an updated brand identity, and we were able to acquire MPT as our stock ticker. Given the encouraging performance trends across the portfolio, we remain confident in reaching our goal of over $1 billion in annualized cash rent by year end.
Thank you, Ed. Entering 2026, I'm encouraged by the strength and steadiness we see. Echoing Ed's comments, 2025 was a year in which we solidified our foundation for long-term, sustainable performance. Our operators' discipline, coupled with our own structured approach to retenanting and portfolio positioning, gives us confidence as we look ahead to 2026 and beyond. Our international portfolio today comprises 50% of our investments, and these operators continue to be a cornerstone of portfolio stability. In Germany, median recorded its strongest quarter since entering the portfolio, EBIT-DARM increasing more than 20% year-over-year with occupancy at 90%. Improving reimbursement levels, growing orthopedics demand contributed to notable operational momentum that positions median for continued strong performance in 2026. In the UK, general acute operates of an evolving healthcare landscape. As a result of NHS budget constraints impacting the behavioral health market and strategically modifying service lines to meet market demand at CERT Nental Europe, Swiss Medical Network reported solid year-over-year growth in hospital EBITDA. Its new clinical collaboration with the Mayo Clinic enhanced its long-term capabilities and international reputation. Additional operators such as HM Hospitalis, EMED, and ATOS continue to produce steady performance. Turning to the U.S., Ernest Health delivered double-digit growth in EBIT-DARM year-over-year, supported by strong performance of their inpatient rehabilitation facilities and expansion of inpatient rehab units, with EARNEST also successfully refinanced their 2026 term loan and revolver in Q4, extending maturities out to 2030 and compressing the rate, a significant credit enhancement. At LifePoint Behavioral, new leadership is implementing forward-looking program enhancements that will modernize the segment, control labor costs, and support a strong revenue mix throughout 2026. As Ed mentioned, we recently entered into a new master lease agreement with Vibra, who increased EBIT-DARM coverage 28% year-over-year in Q3, driven by strong earnings in the rehab division. Our other longstanding tenants, such as surgery partners, continue to report healthy performance trends. A recently transitioned tenant's rent continues to ramp, and we expect them to be at 100% contractual rent by the end of 2026. We entered into a new 15-year lease agreement with NOOR Health Systems in California, $5 million in December, in line with the rent previously paid by Prospect for these facilities. HSA showed measured progress in Q4 with modest improvements in collections across its market. Supplemental receipts and the expected implementation of the Meditech EMR system in Q2 are anticipated to support operations and facilitate costs. While HSA remains focused on improving cash collections, it's important to remember that HSA will finally be fully standalone operationally once the EMR system is implemented. We feel comfortable with the steps underway to drive revenue cycle management enhancements. Our team continues to carefully monitor performance across these new operators. In fact, just last week, members of our team visited the NOR and HSA Miami facilities, all of which had high patient activity. It's clear that efforts to bring back doctors and improve EMS turnaround times are already having a positive impact. While the facilities are generally clean and in good condition, each operator is actively undertaking projects to modernize the properties. Taken together, the consistent performance of our international assets, the steady execution of our core U.S. operators and the ongoing ramp of our transitioned tenants provide us with a clear, confident outlook heading into 2026. We expect 2026 to be a year of continued stabilization and increasing cash rents as our tenants capitalize on service line enhancements, reimbursement tailwinds, EMR modernization, and operating efficiencies gained throughout Our global portfolio is stronger than it has ever been in the long-term earnings power of these assets.
Fourth quarter and 58 cents per year 25. As mentioned in our press release, fourth quarter. Otherwise it would have been for the bill to begin paying finally $70 million of net.
Thank you, Kevin. I just have a few general comments and we can take any questions. And our options for refinancing and deleveraging. The maturity is a 500 million euro unsecured notes issue. We are paying a rate of 0.99% on these notes, and so we'll, of course, matter in a $200 million term loan. We'll mature in June of 2020. Then our $1.4 billion unsecured notes issued numerous options for refinancing maturing debt over the next two years. Without belaboring those options, which we're refinancing with secured debt, additional asset sales, and other transactions, as the capital markets and our cost of confidence in these options because of our recent subtractive term of secured notes we issued a year ago, the euro portion of which are now trading at premiums implying a 5-ish percent rate, and the successful 10-year secured financing of our German rehab portfolio in June of last year at a similar. Our carefully crafted covenants have provided plenty of headroom to be able to consider each of these potential options. As Ed mentioned, we announced a $150 million share repurchase plan last quarter that we used to repurchase a little less than 1% of our market cap through the end of the year. We also invested about $60 million into attractively-priced and well-performing post-acute rehabilitation facilities, which we intend to add to the respective master leases of two important, long, modest acquisitions, the acute and post-acute hospital attractive growth opportunities both in the U.S. and Europe, that we will take advantage of as our cost of capital. Over to the operator to cue any questions.
Operator
At this time, I would like to remind everyone, in order to ask a question, press start with the number one on your telephone keypad. Please limit to one question and one follow-up. Our first question will come from the line of Michael Diana with Maxim Group. Please go ahead.
Thank you. I'd like to talk a little about your facility recycling during the quarter. I think you mentioned you sold six small properties, and in a surprise to me anyway, bought two properties. So maybe you could talk about those eight properties, but also just more in general what your view is on the recycling.
Sure, Michael. But let me first take the opportunity to thank you for picking up coverage on us and the time you spent. The six properties that we sold were smaller properties. They were properties that were underperforming for the rest of the portfolio. We will continue to look at opportunities like that going forward. But also, we're in a position now where we can go back into the acquisition mode. We'll do it very selectively. We believe that the two properties that we acquired are a very good investment and the opportunity for us to continue to support.
Okay, great. Thank you very much.
Operator
Our next question will come from the line of John Kilikowski with Wells Fargo. please go ahead.
Good morning. Thanks for taking my question. Maybe if we could just start on the prospect sales, if you could just kind of help me with sources and uses. I think you gave some helpful color in the opening remarks, but maybe just to tie it all together. Could you talk about the sales proceeds from the assets that have closed, the expectations of the asset under contract, and then maybe what's going to be above and beyond the debt financing and where those proceeds will go.
So the only remaining transaction that's pending is the in this quarter. It's a completely final over the next, you know, 60 to 90 days. We'll fully pay the dip. As we announced previously, probably going back as many as two dip.
That's helpful. Thank you. And then maybe just jumping to your 26 ramp target and the ramp from your legacy assets, legacy steward That's the $22 million that you got this quarter. I believe last quarter we got some color on expectations looking forward. Are you able to provide any color on what you expect to receive in the first quarter of this year?
No, we're not yet getting guidance on quarterly or annual amounts for a couple of reasons. One is, as Kevin mentioned, we still have several fairly significant tenants. It has ramped in accordance that we entered into with those tenants going on 18 months ago. Now we continue to expect through 2026, by the end of 2026, we'll be at an annualized.
John, I think just for the further answer to that question with Steve is that there was one payment that HSA, the next big June, I believe it is.
Operator
Our next question will come from the line of Austin Wershmith with KeyBank. Please go ahead.
Hi, this is Vikram Garawal on for Austin. Thanks for taking our questions. Just one for me. Can you provide us with some additional color on the Vibra restructuring, specifically what was previous and what is the new cash rent expected from Vibra?
No, we haven't detailed that out. I'll remind you for the last couple of years, we've referred to this tenant that we've been recent $18 million previous because.
Nick, as a part of answering that question, they're in a much better position today than they have previously standpoint.
Understood. That's helpful. Thank you.
Operator
Our next question will come from the line of Michael Carroll with RBC Capital Markets. Please go ahead. Michael, you might be on mute.
Sorry. I wanted to stay on the Vibra transaction. I just wanted to confirm in the press release, it sounded like the $32 million acquisition was leased to Vibra. I mean, did you buy that from Vibra? And if so, why was that included in this transaction?
We did buy it from Vibra, and it is a great facility that we filled.
Okay, and then the cash went to Vibra for that specific deal then?
Just to clarify a little bit, the $18 million we've actually had on our books a significant $40 million. And of that, about half of it, we held in reserve.
I mean, is there, and maybe it's just because the transaction is pretty complicated. I know that we've been talking about the 1% tenant slash Vibra for, it seems like, the past few years now. I mean, is there a reason why it took so long to get this done? And is there anything, I guess, and back to your earlier comments, Steve, you said that you weren't recognizing any rent from vibro so did vibra have zero rent payment in the fourth quarter outside of that 18 million dollar um payment so it will be additive as you go into one q26 they were actually that had not previously been recognized thank you our next question will come from the line of
mike mueller with jp morgan please go ahead yeah um couple couple questions i guess on on the first one for this acquisition and the other acquisition can you talk about pricing i guess the cap rates and coverages and then for the second question maybe just a little bit bigger picture i know you bought some stock back in the quarter but you also went through all the you know debt maturities coming due over the next couple of years how are you thinking about today kind of buybacks versus delivery part of that mike the coverage on on both of these were very strong uh the cap rates are also very attractive.
As you know, it's not to go disclose to each individual on the various properties, but these are very strong both on the coverage and from actually before, Mike, on the balance.
Operator
Our next question will come from the line of Vikram Melhotra with Mizuho. Please go ahead.
Morning. Thanks for taking the questions. I guess two ones. One, just, you know, bigger picture. You know, you mentioned the acquisitions. I'm just wondering sort of as the portfolio stands today, whether it's, you know, just non-core or international, can you just talk about potential sales and give us an update on like how the buyer pool has shaped up, what sort of capital is still interested in, you know, owning hospital real estate?
But we are more in an acquisition mode.
And then I guess just on that acquisition point, just looking at the different uh i guess sub-asset classes you know behavioral uh leaving hospital aside i'm wondering sort of the opportunity set when you look at post-acute and behavioral um are there any uh specific focus areas any types of asset just and i'm wondering just if you if you look to sort of maybe i don't want to call it expand but maybe shift the focus in terms of types of, you know, healthcare slash hospital settings in terms of acquisitions?
Sure. Our focus will continue to be general acute care, which it has been the life of medical property, but that's primary, which we've been very strong on. Behavioral softness has not come from lack of demand, but lack of ability to have the It's much more the desirous funding standpoint, but probably the biggest acquisitions we'll make today will be acute care being rehab.
Operator
Our next question will come from the line of Feral Granath with Bank of America. Please go ahead. Hi, thank you for taking my question. This is Feral Granath.
I just wanted to also dig in a little bit more on your acquisitions. Just when thinking about Europe versus the U.S., especially now that we've seen some pressures just on public pay with headlines and reimbursement rates, does that weigh in on how you're evaluating your pipeline, or can you give a quantifiable qualitative of how you think about your pipeline in both regions?
That's a good question, Farrell. As you know, we're roughly 50-50 now, 50% of the United States and 50% outside of the United States. Still believe that the United States, and we obviously will continue to focus here, but it is less political outside of the United States. And we'll continue to look for expansion in places in Europe and places where we are not. We still feel very good about where health care in general is in the United States and feel very good that there will continue to be small ups and downs, but we don't think there will be any big in the United States.
Thank you. And I guess also on that, when thinking about the people who are selling, Are these, and the properties that you're acquiring, are these marketed deals? Are you having reverse inquiries? Are these also just operators that you have past business with? Just curious how that pipeline is building out.
Yeah, it's probably 50% or slightly more of people that we've already done business with, existing tenants or tenants that have formerly been our tenants. There's still a very strong pipeline of people who know who we are that are looking to make acquisitions and to use our type of funding for most of the deals that come to market in transactions.
In addition, it just happens indicative of the size. We could have, I'll put it this way, there were available many more that we could have done that we evaluate, but, again, we're being very selective.
Thank you very much. That was great, Culler.
Operator
Our next question is a follow-up from the line of Michael Carroll with RBC Capital Markets. Please go ahead.
Thanks. I guess, Ed or Rosa, I wanted to follow up and circle back on the comments related to HSA. Can you remind us, is that operator cash flow positive today with the rent fully ramped? I know that you indicated that last quarter that their coverage was above one on the fully rent ramped, but obviously it takes time for cash collections to pick up to equal that.
Yeah, the cash collections, as Rosa pointed out, are not where any of us would like to see them. However, if you look at this from where they came from, not just as a typical startup, they actually started out in the hole picking up the steward properties. We're very pleased with where they are. We obviously want them to be much better. We talked about their being able to, in the second quarter, viewing it to be at one time.
And then just last one for me, I mean, does HSA or NOR need to be, Is NPW needing to provide them working capital loans still, or have they weaned off of those specific loans and are able to work with what they have on their own balance sheets?
Yeah, we have not provided any additional working capital loans for either one of those We have provided HSA with funding to help them acquire the Meditech license, and with NOR, the last fundings that we were participating in those were left over.
Operator
And I will now turn the call back over to Ed Aldak for closing comments.
Regina, thank you very much, and again, thank all of you for listening today. And as always, if you have any additional questions, please don't hesitate to reach out to us.
Operator
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now discuss.
