New Issue: Essex Property releases details of $200 million placement of notes

By Angela McDaniels

Tacoma, Wash., March 20 - Essex Property Trust, Inc. disclosed more information about a private placement of $200 million of notes in an 8-K filing with the Securities and Exchange Commission on Tuesday.

The notes priced on March 14. They will be guaranteed by Essex Property and issued by its operating partnership, Essex Portfolio, LP.

The notes will be issued in three tranches: $100 million of 4.27% notes, series C, due April 30, 2021, $50 million of 4.3% notes, series D, due June 29, 2021 and $50 million of 4.37% notes, series E, due Aug. 30, 2021.

The series C notes will settle between April 30 and May 2. The series D notes will settle between June 29 and July 3. The series E notes will settle between Aug. 30 and Sept. 4.

The notes have a make-whole call option at Treasuries plus 50 basis points. The company must offer to prepay the notes upon a change of control.

The lead placement agent is Mitsubishi UFJ Securities (USA), Inc. The co-placement agents are BMO Capital Markets, PNC Capital Markets LLC and US Bancorp Investments, Inc.

The purchasers are Aviva Life and Annuity Co., CMFG Life Insurance Co., New York Life Insurance Co., New York Life Insurance and Annuity Corp., United Insurance Co. of America, American Fidelity Assurance Co., Catholic United Financial, Farm Bureau Life Insurance Co. of Michigan, Blue Cross and Blue Shield of Florida, Inc., Prudential Insurance Co. of America, Pruco Life Insurance Co., United Insurance Co. of America, Farmers New World Life Insurance Co., Jackson National Life Insurance Co., Great-West Life & Annuity Insurance Co., Thrivent Financial for Lutherans, Knights of Columbus, Genworth Life and Annuity Insurance Co., MassMutual Asia Ltd., Massachusetts Mutual Life Insurance Co., C.M. Life Insurance Co., Protective Life Insurance Co., National Teachers Associates Life Insurance Co., Lifecare Assurance Co., Equitable Reserve Association, Central States Health & Life Co. of Omaha, Catholic Holy Family Society, American Home Life Insurance Co., MONY Life Insurance Co. and AXA Equitable Life Insurance Co.

The covenants under the note purchase agreement cap the company's ratio of debt to assets at 60% and its ratio of secured debt to assets at 55%. The latter cap will step down to 50% on Dec. 31, 2013 and to 45% on Dec. 31, 2015. The company must maintain a minimum interest coverage ratio of 1.5 times and a minimum net worth of $850 million.

Proceeds will be used for general corporate purpose, including to repay a portion of the company's outstanding debt under its $425 million unsecured line of credit.

Essex is a Palo Alto, Calif.-based real estate investment trust with a focus on multifamily residential properties.

Issuer:	Essex Portfolio, LP
Guarantor:	Essex Property Trust, Inc.
Issue:	Guaranteed senior notes
Amount:	$200 million
Call option:	Make-whole at Treasuries plus 50 bps
Agents:	Mitsubishi UFJ Securities (USA), Inc. (lead), BMO Capital Markets, PNC Capital Markets LLC and US Bancorp Investments, Inc.
Purchasers:	Aviva Life and Annuity Co., CMFG Life Insurance Co., New York Life Insurance Co., New York Life Insurance and Annuity Corp., United Insurance Co. of America, American Fidelity Assurance Co., Catholic United Financial, Farm Bureau Life Insurance Co. of Michigan, Blue Cross and Blue Shield of Florida, Inc., Prudential Insurance Co. of America, Pruco Life Insurance Co., United Insurance Co. of America, Farmers New World Life Insurance Co., Jackson National Life Insurance Co., Great-West Life & Annuity Insurance Co., Thrivent Financial for Lutherans, Knights of Columbus, Genworth Life and Annuity Insurance Co., MassMutual Asia Ltd., Massachusetts Mutual Life Insurance Co., C.M. Life Insurance Co., Protective Life Insurance Co., National Teachers Associates Life Insurance Co., Lifecare Assurance Co., Equitable Reserve Association, Central States Health & Life Co. of Omaha, Catholic Holy Family Society, American Home Life Insurance Co., MONY Life Insurance Co. and AXA Equitable Life Insurance Co.
Pricing date:	March 14
Distribution:	Private placement
Series C
Amount:	$100 million
Maturity:	April 30, 2021
Coupon:	4.27%
Settlement date:	Between April 30 and May 2
Series D
Amount:	$50 million
Maturity:	June 29, 2021
Coupon:	4.3%
Settlement date:	Between June 29 and July 3
Series E
Amount:	$50 million
Maturity:	Aug. 30, 2021
Coupon:	4.37%
Settlement date:	Between Aug. 30 and Sept. 4

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