An American property group is close to finalising a £650m deal to refinance debt secured against dozens of British hospitals.

Sky News understands that Medical Properties Trust, which is listed in New York, is close to announcing an agreement with a group of financial institutions.

City sources said on Thursday that the deal would encompass 27 hospitals across the UK, all of which are operated by Circle Health on long-term leases.

The $800m refinancing will be among the largest such deals in the UK healthcare sector in recent months.

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Insiders said it was being led by Song Capital, a UK and European investment firm, with support from Aviva, Canada Life and Phoenix Group.

Medical Properties Trust (MPT) is one of the world’s largest owners of healthcare real estate with more than 430 properties valued at over $17bn.

Circle Health’s operating business was acquired by Abu Dhabi-backed PureHealth for $1.2bn in a deal which completed earlier this year.

One source said the financing had been oversubscribed among Song Capital’s investors.

Song was established by Dan MacKinnon and Tom Pritchard in 2021, and has accumulated interests across the healthcare and leisure sectors.

In 2022, it provided the UK’s largest healthcare charity, Nuffield Health, with approximately £250m of real estate financing secured against 10 hospitals.

MPT’s stock market valuation has plummeted in recent times and is down by nearly 40% over the last year alone.

It now has a market capitalisation of just under $3bn.

Rothschild is understood to be advising Song Capital on the deal.

Neither Song nor MPT responded to a request for comment on Thursday.