Safehold Announces $750 Million Commercial Paper Note Program
Safehold (NYSE: SAFE) has launched a $750 million unsecured commercial paper note program through its operating company, Safehold GL Holdings This program allows the issuance of unsecured commercial paper notes, which will rank equally with other senior unsecured debt of the operating company and are fully guaranteed by Safehold. The proceeds will be used for general corporate purposes. Safehold expects cost of capital benefits compared to its $2.0 billion revolving credit facility, which will serve as a liquidity backstop for the notes. The notes are not registered under the Securities Act of 1933 and cannot be sold in the U.S. without registration or exemption.
- Launch of a $750 million unsecured commercial paper note program, providing significant financing capacity.
- Expected cost of capital benefits compared to the existing $2.0 billion revolving credit facility.
- Use of revolving credit facility as a liquidity backstop, enhancing financial stability.
- Unregistered notes cannot be sold in the U.S. without registration or applicable exemption, potentially limiting marketability.
Safehold Inc.'s announcement of a
The establishment of the commercial paper note program by Safehold is a strategic move aimed at leveraging the current dynamics of the capital market. The U.S. commercial paper market is characterized by short-term, lower-cost borrowing, which aligns with Safehold's objective to optimize its cost of capital. This initiative could be a response to current favorable conditions in the commercial paper market, which typically features lower interest rates compared to long-term debt instruments. For retail investors, it is important to understand that this financial maneuver can enhance Safehold's profitability by reducing interest expenses, provided that the market remains stable. This program also underscores the company’s confidence in its creditworthiness and its ability to continuously manage debt efficiently. Nevertheless, the company's success in this strategy will depend on its ongoing ability to access the commercial paper market under favorable terms.
Under the terms of the program, the operating company may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any one time of
The Company expects to realize cost of capital benefits in the commercial paper market versus its
The notes to be offered under the commercial paper note program have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in
About Safehold:
Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT), seeks to deliver safe, growing income and long-term capital appreciation to its shareholders. Additional information on Safehold is available on its website at www.safeholdinc.com.
Company Contact:
Pearse Hoffmann
Senior Vice President
Capital Markets & Investor Relations
T 212.930.9400
E investors@safeholdinc.com
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SOURCE Safehold
FAQ
What has Safehold announced regarding a new financial program on June 21, 2024?
What is the maximum amount of commercial paper notes that Safehold can issue under the new program?
What will the proceeds from Safehold's commercial paper notes be used for?
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