Realty Income Prices $1.25B in Senior Notes for General Corporate Purposes
Realty Income Corporation, also known as The Monthly Dividend Company®, has announced the pricing of a dual-tranche offering totaling $1.25 billion in senior unsecured notes. The proceeds from this offering will be used for general corporate purposes. Realty Income, a real estate investment trust (REIT), is a member of the S&P 500 Dividend Aristocrats® index. The company’s monthly dividends are backed by a portfolio of over 13,250 real estate properties under long-term net lease agreements.
Details of Realty Income’s Dual-Tranche Offering for Senior Unsecured Notes
The dual-tranche offering by Realty Income comprises $450 million of 4.750% notes due February 15, 2029, and $800 million of 5.125% notes due February 15, 2034. These senior unsecured notes have different maturity dates, providing flexibility to the investors. Realty Income’s offering allows investors to choose the tranche that suits their investment preferences.
Yield and Pricing Information for Realty Income’s 2029 and 2034 Notes
The 2029 Notes have been priced at 99.225% of their principal amount, resulting in a semi-annual yield to maturity of 4.923%. On the other hand, the 2034 Notes have been priced at 98.910% of their principal amount, providing a yield to maturity of 5.265%. The differing yields and pricing of these notes reflect the different risk and return profiles associated with each tranche.
Use of Proceeds for Realty Income’s $1.25B Senior Notes Offering
Realty Income intends to use the net proceeds from this offering for general corporate purposes. These purposes may include repaying or repurchasing company debt, such as borrowings under Realty Income’s revolving credit facility and commercial paper programs. Additionally, the proceeds may be used for foreign currency swaps or other hedging instruments. The company also plans to invest in property development, redevelopment, acquisitions, business combinations, as well as property expansions and improvements.
Realty Income’s Offering to Close on January 16, 2024, with Active Joint Book-Running Managers
The offering is expected to close on January 16, 2024, subject to customary closing conditions. Wells Fargo Securities, BBVA, Citigroup, Mizuho, and TD Securities are acting as the active joint book-running managers for the offering. Their involvement in the offering highlights the confidence and support from leading financial institutions in Realty Income’s business and the attractiveness of the senior unsecured notes offering.
This announcement by Realty Income reflects the company’s strategic approach to capital raising to support its ongoing operations and growth. As an established REIT and a member of the S&P 500 Dividend Aristocrats®, Realty Income continues to demonstrate its commitment to providing consistent monthly dividends to its shareholders while pursuing opportunities to enhance its real estate portfolio.
Analyst comment
Positive news. The pricing of the dual-tranche offering of senior unsecured notes will provide Realty Income with funding for general corporate purposes, including debt repayment, property development, and acquisitions. The participation of leading financial institutions in the offering highlights their confidence in Realty Income’s business. Market response is expected to be favorable, with potential growth and increased investor interest.
