Blackstone Mortgage Trust Announces Pricing of Offering of Senior Secured Notes

Rhea-AI Summary

Blackstone Mortgage Trust (NYSE: BXMT) has priced a private offering of $450 million in 7.750% senior secured notes due 2029. The company plans to use the net proceeds for general corporate purposes, including paying down existing secured indebtedness. The offering, to qualified institutional buyers in the US and international investors under Regulation S, is expected to close on December 10, 2024, subject to customary conditions. The notes and related guarantees are not registered under the Securities Act and cannot be offered or sold in the US without registration or exemption.

Positive

• Successful pricing of $450 million senior secured notes offering
• Debt refinancing opportunity through paying down existing secured indebtedness

Negative

• Additional debt burden with 7.750% interest rate
• Increased leverage through new notes issuance

Insights

Fixed Income Analyst

The $450 million senior secured notes offering at 7.75% interest reflects BXMT's strategic move to strengthen its financial position. The pricing, while relatively high, aligns with current market conditions and the company's credit profile. The 2029 maturity provides extended runway for debt management.

Using proceeds to pay down existing secured debt suggests a liability management exercise that could potentially improve the company's debt structure and reduce near-term maturities. This refinancing approach, while not reducing overall leverage, helps manage interest rate exposure and extends the debt maturity profile.

The private placement format targeting qualified institutional buyers indicates strong institutional interest, though the secured nature of the notes highlights the current challenging environment for real estate finance companies. The pricing level suggests some market concerns about commercial real estate sector risks.

NEW YORK--(BUSINESS WIRE)-- Blackstone Mortgage Trust, Inc. (NYSE: BXMT) (the “Company” or “BXMT”) announced the pricing of a private offering of $450 million in aggregate principal amount of its 7.750% senior secured notes due 2029 (the “Notes”). The Company intends to use the net proceeds of the Notes offering for general corporate purposes, including paying down existing secured indebtedness. The Notes offering is expected to close on December 10, 2024 and is subject to customary closing conditions.

The offering of the Notes and the related guarantees is being made in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in the United States only to persons reasonably believed to be “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act, or outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This notice is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Blackstone Mortgage Trust

Blackstone Mortgage Trust (NYSE: BXMT) is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators. These senior loans are capitalized by accessing a variety of financing options, depending on our view of the most prudent strategy available for each of our investments. We are externally managed by BXMT Advisors L.L.C., a subsidiary of Blackstone.

About Blackstone

Blackstone is the world’s largest alternative asset manager. Blackstone seeks to deliver compelling returns for institutional and individual investors by strengthening the companies in which it invests. Blackstone’s more than $1.1 trillion in assets under management include global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect BXMT’s current views with respect to, among other things, certain financing transactions. You can identify these forward-looking statements by the use of words such as “outlook,” “objective,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission (“SEC”) which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the filings. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances.

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Source: Blackstone Mortgage Trust, Inc.

FAQ

What is the interest rate of BXMT's 2029 senior secured notes?

The senior secured notes due 2029 carry an interest rate of 7.750%.

What is the size of BXMT's December 2023 notes offering?

Blackstone Mortgage Trust's notes offering is $450 million in aggregate principal amount.

When will BXMT's new senior secured notes mature?

The senior secured notes will mature in 2029.

How will BXMT use the proceeds from the notes offering?

BXMT intends to use the net proceeds for general corporate purposes, including paying down existing secured indebtedness.