Realty Income Prices $1.0 Billion Offering of Dual-Tranche Senior Unsecured Notes

Rhea-AI Summary

On April 5, 2023, Realty Income Corporation (NYSE: O) announced the pricing of a public offering of $1 billion in senior unsecured notes. This includes $400 million of 4.70% notes maturing on December 15, 2028, and $600 million of 4.90% notes maturing on July 15, 2033. The effective semi-annual yields to maturity are 4.912% and 5.148%, respectively. Proceeds from this offering will be allocated primarily for general corporate purposes, including the repayment of indebtedness and property acquisitions. The offering is set to close on April 14, 2023. Wells Fargo Securities, Barclays, and other firms are the joint book-running managers for the offering.

Positive

• Successful pricing of $1 billion in senior unsecured notes, indicating strong market confidence.
• Proceeds will enable repayment of high-interest debt, which could lower future interest expenses.
• Enhancement of property portfolio through acquisition and development, supporting long-term growth.

Negative

• Issuance of additional debt could lead to increased leverage, raising financial risk.
• Investors may be concerned about the interest rate environment impacting future borrowing costs.

SAN DIEGO, April 5, 2023 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced the pricing of a public offering of $400 million of 4.70% senior unsecured notes due December 15, 2028 (the "2028 Notes") and $600 million of 4.90% senior unsecured notes due July 15, 2033 (the "2033 notes"). The public offering price for the 2028 Notes was 98.949% of the principal amount for an effective semi-annual yield to maturity of 4.912% and the public offering price for the 2033 Notes was 98.020% of the principal amount for an effective semi-annual yield to maturity of 5.148%. Combined, the notes have a weighted average tenor of approximately 8.0 years and a weighted average semi-annual yield to maturity of 5.054%.

The net proceeds from this offering will be used for general corporate purposes, including but not limited to, the repayment or repurchase of Realty Income's indebtedness (including borrowings under Realty Income's $4.25 billion multi-currency revolving credit facility or Realty Income's multi-currency commercial paper programs), foreign currency or interest rate swaps or other hedging instruments, the development and acquisition of additional properties and other acquisition or business combination transactions, and the expansion and improvement of certain properties in Realty Income's portfolio.

This offering is expected to close on April 14, 2023, subject to the satisfaction of customary closing conditions.

The active joint book-running managers for the offering are Wells Fargo Securities, Barclays, BNP PARIBAS, Goldman Sachs & Co. LLC and TD Securities.

A copy of the prospectus supplement and prospectus, when available, related to this offering may be obtained by contacting: Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402, Attn: WFS Customer Service, Email: wfscustomerservice@wellsfargo.com, by telephone (toll free) at 1-800-645-3751; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by telephone: (888) 603-5847 or email: barclaysprospectus@broadridge.com; BNP Paribas Securities Corp., 787 Seventh Avenue, New York, New York 10019, Attn: Syndicate Desk, Email: DL.US.Syndicate.Support@us.bnpparibas.com, by telephone (toll free) at 1-800-854-5674; Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, by telephone (collect) at 1-866-471-2526 or TD Securities (USA) LLC, 1 Vanderbilt Avenue, 11th Floor, New York, New York 10017, Attn: Transaction Advisory, by telephone (toll free) at (855) 495-9846.

These securities are offered pursuant to a Registration Statement that has become effective under the Securities Act of 1933, as amended. These securities are only offered by means of the prospectus included in the Registration Statement and the prospectus supplement related to the offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer or sale of these securities in any state or other jurisdiction where, or to any person to whom, the offer, solicitation, or sale of these securities would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Realty Income
Realty Income, The Monthly Dividend Company^®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats^® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 12,200 real estate properties primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 633 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 120 times since Realty Income's public listing in 1994 (NYSE: O).

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio, operating results, strategy, plans, and the intentions of management including the offering of the notes, use of proceeds and the anticipated closing date. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a REIT; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding; continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including our clients' defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; changes in domestic and foreign income tax laws and rates; our clients' solvency; property ownership through joint ventures and partnerships which may limit control of the underlying investments; the continued evolution of the COVID-19 pandemic or future epidemics or pandemics, measures taken to limit their spread, the impacts on us, our business, our clients (including those in the theater and fitness industries), and the economy generally; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; any effects of uncertainties regarding whether the anticipated benefits or results of our merger with VEREIT, Inc. will be achieved; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Those forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

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SOURCE Realty Income Corporation

FAQ

What was Realty Income's recent public offering announcement?

Realty Income announced a public offering of $1 billion in senior unsecured notes on April 5, 2023.

What are the terms of Realty Income's new notes?

The offering includes $400 million of 4.70% notes due December 15, 2028, and $600 million of 4.90% notes due July 15, 2033.

When is the expected closing date for Realty Income's offering?

The offering is expected to close on April 14, 2023.

What will the proceeds from Realty Income's offering be used for?

Proceeds will be used for general corporate purposes, including repayment of debt and property acquisitions.

Who managed Realty Income's public offering?

The offering was managed by Wells Fargo Securities, Barclays, BNP Paribas, Goldman Sachs, and TD Securities.