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Plymouth Industrial REIT Makes Early Improvement to Balance Sheet with Conversion of Remaining Series B Preferred Stock
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Rhea-AI Summary
Plymouth Industrial REIT (NYSE: PLYM) announced a balance sheet improvement through the early conversion of Series B Preferred Stock into approximately 1.9 million shares of common stock. This conversion, supported by Madison International Realty, simplifies the company's financials without increasing leverage. Plymouth also executed a $150 million interest rate swap, fixing rates on 95% of its debt. The company expects to meet its previously issued full-year 2022 guidance. CEO Jeff Witherell noted the strengthening of the balance sheet, while Madison expressed commitment to Plymouth's growth.
Positive
Plymouth improved balance sheet through early Series B Preferred Stock conversion, enhancing financial stability.
95% of outstanding debt is now fixed, mitigating interest rate risks.
The company expects to achieve full-year 2022 results within previously issued guidance.
Negative
None.
BOSTON--(BUSINESS WIRE)--
Plymouth Industrial REIT, Inc. (NYSE: PLYM) announced the Company has improved its balance sheet earlier than anticipated with the conversion of the remaining Series B Preferred Stock held by Madison International Realty (“Madison”) into approximately 1.9 million shares of common stock on a leverage-neutral basis. The Company also affirmed that with this earlier conversion and the execution of an interest rate swap for $150 million of notional unsecured debt, it still expects to report full year 2022 results within its previously issued guidance ranges.
On August 12, 2022, Madison informed the Company that it had elected to convert its remaining 2,205,882 shares of Series B Preferred Stock into common stock. Based on the contractual liquidation preference and the 20-day VWAP (volume weighted average price) of $18.84 at the time of conversion, Madison was entitled to receive 2,712,690 shares of common stock. Pursuant to the terms of the agreement, Plymouth elected a combination settlement comprised of 1,915,511 shares of common stock and $15.0 million in cash. The cash portion was provided by a one-time use of the Company’s ATM program to transact with one institutional investor at $21.35 a share.
Plymouth also announced that the rate on approximately 95% of its outstanding debt as of June 30, 2022 is now fixed. The Company recently entered into interest rate swap agreements with JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Capital One, N.A. for a total notional amount of $150 million to fix the USD-SOFR floating rate at 2.904%. The spread over the applicable rate on the $150 million term loan is based on the Company's total leverage ratio. Outstanding borrowings on Plymouth’s revolving credit facility comprise the Company’s only remaining floating-rate debt.
Jeff Witherell, Chief Executive Officer and Co-Founder of Plymouth, noted, “While the conversion of these Series B preferred shares was earlier than we had originally anticipated, we have now simplified and strengthened our balance sheet on a leverage-neutral basis. Madison’s support as a shareholder and as a past joint venture partner has played an important role in Plymouth’s growth, and we welcome them as our largest shareholder. With the strategic execution of our ATM program through a block trade, we were able to add another top 10 shareholder, partially fund the conversion with cash and minimize the number of common shares that would have otherwise been required.”
Ronald Dickerman, Madison International Realty Founder and President, added, “Madison is pleased to participate in the simplification of Plymouth’s balance sheet while further supporting its stock, given what we continue to see as a high growth business led by a highly capable management team.”
About Plymouth
Plymouth Industrial REIT, Inc. (NYSE: PLYM) is a real estate investment trust focused on the acquisition, ownership and management of single and multi-tenant industrial properties, including distribution centers, warehouses, light industrial and small bay industrial properties, located in primary and secondary markets within the main industrial, distribution and logistics corridors of the United States.
Forward-Looking Statements
This press release includes “forward-looking statements” that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
