VEREIT® Announces Pricing of $600 Million of Senior Notes

Rhea-AI Summary

VEREIT, Inc. (NYSE: VER) announced the pricing of a $600 million offering of 3.40% senior notes due 2028, expected to close on June 29, 2020. The proceeds will be used to redeem approximately $100 million of the company's 6.70% Series F Cumulative Redeemable Preferred Stock and repay revolving credit facility borrowings. The senior notes will be senior unsecured obligations, guaranteed by VEREIT. The offering is managed by several financial institutions under an effective registration statement filed with the SEC.

Positive

• Offering of $600 million in senior notes may improve capital structure.
• Proceeds used to redeem high-interest preferred stock, potentially reducing interest obligations.

Negative

• Issuance of new debt may increase overall leverage risk.
• Repayment of existing debt may indicate ongoing liquidity concerns.

PHOENIX, June 18, 2020 /PRNewswire/ -- VEREIT, Inc. (NYSE: VER) ("VEREIT") announced today that its operating partnership, VEREIT Operating Partnership, L.P. (the "Operating Partnership" and, together with VEREIT, the "Company"), priced an offering of $600 million aggregate principal amount of 3.40% senior notes due 2028 (the "Notes") at an issue price of 99.144% of par value.  Interest on the Notes will be payable in cash and will accrue at a rate of 3.40% per annum.  The Notes will be senior unsecured obligations of the Operating Partnership, guaranteed by VEREIT.  The offering of Notes is expected to close on June 29, 2020, subject to the satisfaction of customary closing conditions.

The Operating Partnership intends to use the net proceeds from the offering of the Notes to (i) make a distribution to VEREIT to fund the redemption of approximately $100 million of VEREIT's 6.70% Series F Cumulative Redeemable Preferred Stock and (ii) repay borrowings under its revolving credit facility contemporaneously with or shortly after the closing of the offering.  In addition, the Operating Partnership may use a portion of the net proceeds from the offering, together with borrowings under its revolving credit facility or cash on hand, to make a distribution to VEREIT to fund the purchase of a portion of or the repayment at maturity of VEREIT's 3.75% Convertible Senior Notes due 2020. These intentions are subject to change.

Wells Fargo Securities, LLC, Barclays Capital Inc., BofA Securities, Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, U.S. Bancorp Investments, Inc., BMO Capital Markets Corp., Capital One Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Regions Securities LLC and SMBC Nikko Securities America, Inc. are acting as joint book-running managers, and BNY Mellon Capital Markets, LLC, KeyBanc Capital Markets Inc., Comerica Securities, Inc., FHN Financial Securities Corp. and Janney Montgomery Scott LLC are acting as co-managers for the offering of the Notes. The offering of the Notes was made under an effective shelf registration statement of VEREIT and the Operating Partnership previously filed with the Securities and Exchange Commission ("SEC"). When available, a copy of the final prospectus supplement and prospectus relating to the offering may be obtained from Wells Fargo Securities, LLC at 608 2nd Avenue South, Suite 1000, Attn: WFS Customer Service, Minneapolis, MN 55402 or by calling 800-645-3751; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (888) 603-5847 or email: barclaysprospectus@broadridge.com; BofA Securities, Inc. at 200 North College Street, NC1-004-03-43, Attn: Prospectus Department, Charlotte, NC 28255 or by calling 800-294-1322; J.P. Morgan Securities LLC at 383 Madison Ave., Attn: Investment Grade Syndicate Desk, New York, NY 10179 or by calling 212-834-4533; Mizuho Securities USA LLC at 1271 Avenue of the Americas, New York, NY 10020, Attention: Debt Capital Markets; U.S. Bancorp Investments, Inc. at 214 N. Tryon Street, 26th Floor, Charlotte, North Carolina 28202, Attention: Credit Fixed Income; or by calling 1-877-558-2607; or by visiting the EDGAR database on the SEC's web site at www.sec.gov. 

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of VEREIT or the Operating Partnership, nor shall there be any sale of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any such offer or sale will be made only by means of the prospectus supplement and prospectus forming part of the effective registration statement relating to these securities.

About the Company
VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. The Company has total real estate investments of $14.8 billion including approximately 3,900 properties and 89.5 million square feet. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties.

Forward-Looking Statements
Information set forth in this press release contains "forward-looking statements" (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the Company's expectations and projections regarding future events and plans, the Company's future financial condition, results of operations, liquidity and business, including, but not limited to, statements regarding the closing of the offering of the Notes and the use of proceeds therefrom. Generally, the words "anticipates," "assumes," "believes," "continues," "could," "estimates," "expects," "goals," "intends," "may," "plans," "projects," "seeks," "should," "targets," "will," variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions, risks, uncertainties and other factors, which may be difficult to predict and beyond the Company's control, that could cause actual events and plans or could cause the Company's business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. These factors include the risks and uncertainties detailed from time to time in the Company's filings with the SEC, which are available at the SEC's website at www.sec.gov. The Company disclaims any obligation to publicly update or revise any forward-looking statements contained in this press release whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.

View original content to download multimedia:http://www.prnewswire.com/news-releases/vereit-announces-pricing-of-600-million-of-senior-notes-301079887.html

SOURCE VEREIT, Inc.

FAQ

What are the details of VEREIT's $600 million senior notes offering?

VEREIT announced a $600 million offering of 3.40% senior notes due 2028, priced at 99.144% of par value.

When is the expected closing date for VEREIT's senior notes offering?

The closing date for the senior notes offering is expected to be June 29, 2020.

How will VEREIT use the proceeds from the senior notes offering?

VEREIT plans to use the proceeds to redeem $100 million of its 6.70% Series F Cumulative Redeemable Preferred Stock and repay revolving credit facility borrowings.

What financial institutions are managing VEREIT's senior notes offering?

The offering is managed by Wells Fargo Securities, Barclays Capital, BofA Securities, and others.

What is the interest rate for VEREIT's senior notes?

The interest rate for the senior notes is 3.40% per annum.