CVS Health Care Financing Program Sample:
Credit Lease Loan Product for Loan for a CVS store. Below is a summary of one of several loan products available through Caffrey & Company, LLC when seeking a loan program to finance a CVS store. Rates are as of September 16, 2020 for a CVS Corp Loan Product:
National Credit Lease Loan Program Highlights:
- Loans from $750,000 to $10,000,000 and up
- Multiple structures offered
Including 10 Year Fixed Rate
- Typical rates presently ranging from 3.79% to 3.99%
- Typical amortization: 25 years to 30 years
- Most require a minimum down payment between 20% and 25% of the purchase.
- Caffrey Loan Placement fee 1.0%
- Typical recourse: 20% to 25% Limited
- Flexible prepayment with extra 10% annual paydown allowed with no premium charged
- Minimum remaining primary lease term: 7 Years
- All loans assumable, with only ¼% fee
- Optional 50-day rate lock available
- Rate Lock—50 days from CCL acceptance and deposit submission
- Expedited closing process targets 33—35 days, CCL to potential closing table
Financial Reports and Tenant Description for a CVS store:
Many lenders are attracted to this tenant not only because of the strong public credit ratings but with the expanded diversity this tenant holds in the healthcare marketplace. You can find recent financial reports on CVS web site here.
Description of Business:
CVS Health Corporation (“CVS Health”), together with its subsidiaries (collectively, the “Company”), has more than 9,900 retail locations, approximately 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 103 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year and expanding specialty pharmacy services. The Company also serves an estimated 34 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.
The coronavirus disease 2019 (“COVID-19”) pandemic has severely impacted the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition in the three and six months ended June 30, 2020, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q.
The Company has four reportable segments: Pharmacy Services, Retail/LTC, Health Care Benefits and Corporate/Other, which are described below. This information is meant to help the investor better undertand the nature and business function of this tenant when looking for a loan program for a CVS store.
Pharmacy Services Segment:
Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services and medical spend management. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on public health insurance exchanges (“Public Exchanges”) and private health insurance exchanges, other sponsors of health benefit plans and individuals throughout the United States. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services.
In the Retail/LTC segment sells prescription drugs and a wide assortment of general merchandise, including over-the-counter drugs, beauty products, cosmetics and personal care products, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of June 30, 2020, the Retail/LTC segment operated more than 9,900 retail locations, approximately 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and onsite pharmacies.
Health Care Benefits Segment
The Health Care Benefits segment is one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals. This allows for more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services. In addition workers’ compensation administrative services and health information technology products and services. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.”
The Company presents the remainder of its financial results in the Corporate/Other segment, which consists of:
- Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and Enterprise modernization programs and acquisition-related integration costs; and
- Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.
Many loan products are available on properties support by long term leases from CVS. Below find current credit rating from Moody’s and Standard and Poors (S&P):
Investment Grade Credit Ratings for CVS Health Corp:
For CVS Health Corp. Moody’s reports an investment grade credit rating of Baa2 with a Negative Outlook as of November 28, 2018. Standard and Poors (S&P) issued an investment grade credit rating of BBB, Stable Outlook as of March 6, 2018.
Looking for a different loan program for a CVS store? Need help with a 1031 Exchange in purchasing a CVS store, we can help with a loan product. For more sample rates checkout Commercial Real Estate Loan Rates on our web site.
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