iStar Announces Exchanges with Holders of $194 million of Convertible Notes

Rhea-AI Summary

iStar Inc. (NYSE: STAR) has announced privately negotiated exchange agreements to convert $194 million of its 3.125% Convertible Senior Notes due 2022 into 13.75 million shares of common stock and $14 million in cash. Following this exchange, $93 million of notes will remain, convertible at $13.83 per share. The CEO stated these moves will strengthen the balance sheet, reduce debt, and save on interest expenses as maturity approaches on September 15, 2022.

Positive

• Strengthening of balance sheet through exchange of convertible notes.
• Reduction in outstanding debt by converting notes into equity.
• Savings on interest expenses and mitigation of stock volatility.

Negative

• None.

NEW YORK, April 8, 2022 /PRNewswire/ -- iStar Inc. (NYSE: STAR) announced today that the Company entered into privately negotiated exchange agreements with certain holders of its 3.125% Convertible Senior Notes due 2022 to exchange $194 million aggregate principal amount of the convertible notes for an aggregate of 13.75 million newly issued shares of its common stock and $14 million of cash. 

After the closing of these exchanges, $93 million aggregate principal amount of the convertible notes will remain outstanding. The remaining notes are convertible on a net share settled basis at a current conversion price of $13.83 per share, or 72.3126 shares of iStar common stock, per $1,000 principal amount of notes. The convertible notes are scheduled to mature on September 15, 2022.

"These exchanges further strengthen and simplify our balance sheet," said Jay Sugarman, iStar's Chairman and Chief Executive Officer. "As a result, we will save interest expense and additional conversion ratchets from common stock dividends, preserve cash on hand, reduce our outstanding debt and mitigate volatility on the trading price of our common stock as we approach the maturity of these convertible notes."

The exchanges are being made pursuant to an exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended. This press release does not constitute an offer to exchange the convertible notes for common stock or other securities of iStar.

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iStar Inc. (NYSE: STAR) is focused on reinventing the ground lease sector, unlocking value for real estate owners throughout the country by providing modern, more efficient ground leases on institutional quality properties. As the founder, investment manager and largest shareholder of Safehold Inc. (NYSE: SAFE), the creator of the modern ground lease industry, iStar is using its national investment platform and its historic strengths in finance and net lease to expand the use of modern ground leases within the $7 trillion institutional commercial real estate market. Recognized as a consistent innovator in the real estate markets, iStar specializes in identifying and scaling newly discovered opportunities and has completed more than $40 billion of transactions over the past two decades. Additional information on iStar is available on its website at www.istar.com.

 

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SOURCE iStar Inc.

FAQ

What was the recent announcement by iStar Inc. regarding its convertible notes?

iStar Inc. announced an exchange of $194 million of its convertible notes for 13.75 million shares of common stock and $14 million in cash.

How much of iStar's convertible notes will remain after the exchange?

After the exchange, $93 million of the convertible notes will remain outstanding.

What is the significance of the conversion price of iStar's convertible notes?

The notes are convertible at a price of $13.83 per share, which is crucial for determining the number of shares received upon conversion.

When do the convertible notes from iStar mature?

The convertible notes are scheduled to mature on September 15, 2022.

How does this exchange affect iStar's financial position?

The exchange is expected to simplify the balance sheet, reduce debt, save on interest expenses, and mitigate stock price volatility.