Realty Income Prices $1.1 Billion Offering of Dual-Tranche Senior Unsecured Notes

Rhea-AI Summary

Realty Income Corporation (NYSE: O), known as The Monthly Dividend Company^®, has priced a public offering of $1.1 billion in senior unsecured notes. This includes $500 million of 5.05% notes due January 2026 and $600 million of 4.85% notes due March 2030. The proceeds will be used for general corporate purposes, including debt repayment and property acquisitions. The company has also executed a $500 million interest rate swap to manage borrowing costs effectively. The offering is expected to close on January 13, 2023.

Positive

• Successful pricing of $1.1 billion in senior unsecured notes enhances liquidity.
• Interest rate swap to reduce borrowing costs improves financial flexibility.

Negative

• None.

SAN DIEGO, Jan. 9, 2023 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced the pricing of a public offering of $500 million of 5.05% senior unsecured notes due January 13, 2026 (the "2026 notes"), which are callable at par on January 13, 2024 (the "2026 Notes Par Call Date"), and $600 million of 4.85% senior unsecured notes due March 15, 2030 (the "2030 Notes"). The public offering price for the 2026 Notes was 99.618% of the principal amount for an effective semi-annual yield to maturity of 5.189% and the public offering price for the 2030 Notes was 98.813% of the principal amount for an effective semi-annual yield to maturity of 5.047%.

In conjunction with the pricing of the 2026 notes, the Company executed a three-year, $500 million fixed-to-variable interest rate swap, which is subject to the counterparties' right to terminate the swap at any time following the 2026 Notes Par Call Date and results in an effective variable borrowing rate of SOFR minus 0.0347% thereunder for the duration of the swap. The Company intends to use these variable rate borrowings in lieu of borrowing under the Company's revolving credit facility, which, as of December 31, 2022, permits U.S. borrowings at an interest rate of SOFR plus 0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility commitment fee.

The net proceeds from this offering will be used for general corporate purposes, which may include, among other things, 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 January 13, 2023, subject to the satisfaction of customary closing conditions.

The active joint book-running managers for the offering are Wells Fargo Securities, BofA Securities, Goldman Sachs & Co. LLC, and Morgan Stanley.

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, BofA Securities, Inc., NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, Email: dg.prospectus_requests@bofa.com, by telephone (toll free) at 1-800-294-1322, Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, by telephone (collect) at 1-866-471-2526 or Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036, by telephone (toll free) at 1-866-718-1649.

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 11,700 real estate properties owned under long-term net lease agreements with commercial clients. To date, the company has declared 630 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 118 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," and similar expressions are intended to identify forward-looking statements. Forward-looking statements also include discussions of our business and portfolio including portfolio acquisitions and the related properties timing, concentrations, rent, properties, clients, and impact to the current portfolio, future operations and results, the announcement of operating results, strategy, plans, and the intentions of management. 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 real estate investment trust; general domestic and foreign business and economic conditions; competition; fluctuating interest and currency rates; access to debt and equity capital markets; 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, 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 income tax laws and rates; the continued evolution of the COVID-19 pandemic and the measures taken to limit its spread, and its impacts on us, our business, our clients (including those in the theater industry), or the economy generally; the timing and pace of reopening efforts at the local, state and national level in response to the COVID-19 pandemic and developments, such as the unexpected surges in COVID-19 cases, that cause a delay in or postponement of reopenings; 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 publicly release the results of any revisions to these 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 is the recent offering by Realty Income Corporation (NYSE: O)?

Realty Income Corporation has priced a public offering of $1.1 billion in senior unsecured notes.

What are the specifics of the notes offering by Realty Income (NYSE: O)?

The offering includes $500 million of 5.05% notes due January 2026 and $600 million of 4.85% notes due March 2030.

What will the proceeds from Realty Income's (NYSE: O) note offering be used for?

The proceeds will be used for general corporate purposes, including debt repayment and the acquisition of properties.

When is the expected closing date for Realty Income's (NYSE: O) offering?

The offering is expected to close on January 13, 2023.

What financial strategy has Realty Income (NYSE: O) implemented alongside the note offering?

Realty Income executed a $500 million fixed-to-variable interest rate swap to manage borrowing rates effectively.