Easterly Government Properties to Issue up to $250 Million in Senior Unsecured Notes

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) announced a note purchase agreement to issue up to $250 million in fixed-rate senior unsecured notes. The offering includes two tranches: $50 million with a 2.62% interest rate due in 2028 and $150 million at 2.89% due in 2030. The average maturity of the notes is 8.5 years with a weighted average interest rate of 2.82%. This transaction aims to extend debt maturities and fund future acquisitions, reflecting strong cash flows backed by U.S. Government tenants.

Positive

• Issuing up to $250 million in fixed-rate notes enhances liquidity for future acquisitions.
• Strengthening of debt maturities with a weighted average maturity of 8.5 years.
• Competitive interest rates of 2.62% and 2.89% reflect the company's credit quality.

Negative

• None.

Easterly Government Properties, Inc. (NYSE: DEA) (the “Company” or “Easterly”), a fully integrated real estate investment trust focused primarily on the acquisition, development and management of Class A commercial properties leased to U.S. Government agencies, announced today that it has entered into a note purchase agreement to issue up to $250 million principal amount of fixed rate senior unsecured notes (the “Notes”). The Notes will be issued and sold by Easterly Government Properties LP, the Company’s operating partnership, pursuant to a Note Purchase Agreement dated May 11, 2021, in the following two tranches:

• $50 million 2.62% (7-year Treasury + 140 basis point spread) Senior Notes, Series A, due October 14, 2028
• $150 million 2.89% (ICUR9 + 145 basis point spread) Senior Notes, Series B, due October 14, 2030

The weighted average maturity of the Notes is 8.5 years, and the weighted average interest rate is 2.82%. The Notes are expected to be issued on October 14, 2021, subject to customary closing conditions.

The Company’s operating partnership has the option to increase the Series B tranche of the Notes up to a principal amount of $200 million.

“The strength of the Company’s stable cash flows backed by the full faith and credit of the United States Government was once again demonstrated in the private placement market,” said Meghan G. Baivier, Easterly’s Chief Financial Officer. “Through this transaction, we were able to extend our debt maturities and provide additional dry powder for future acquisitions at a cost of debt that reflects the superior credit quality of our underlying U.S. Government tenant.”

The Notes have not been and will not be registered under the Securities Act of 1933 or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States or any other jurisdiction absent registration or an exemption from the registration requirements of the Securities Act of 1933 and the applicable securities laws of any state or other jurisdiction.

About Easterly Government Properties, Inc.

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased through the U.S. General Services Administration (GSA). For further information on the company and its properties, please visit www.easterlyreit.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “believe,” “expect,” “intend,” “project,” “anticipate,” “position,” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to those risks and uncertainties associated with our business described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on February 24, 2021. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210512005122/en/

FAQ

What is the purpose of the note purchase agreement announced by DEA?

The note purchase agreement aims to issue up to $250 million in notes to enhance liquidity for future acquisitions and extend debt maturities.

What are the details of the tranches in DEA's note offering?

The offering includes two tranches: $50 million at 2.62% due in 2028 and $150 million at 2.89% due in 2030.

What is the weighted average interest rate of the notes issued by DEA?

The weighted average interest rate of the notes is 2.82%.

How does DEA's transaction reflect its cash flow stability?

The transaction highlights strong cash flows supported by U.S. Government tenants, demonstrating credit quality in the private placement market.

When are the notes expected to be issued by DEA?

The notes are expected to be issued on October 14, 2021, subject to customary closing conditions.