By Kenneth Lim
Boston, March 28 - Kilroy Realty Corp. priced $400 million of five-year exchangeable senior unsecured notes at the cheap end of talk on Tuesday to yield 3.25% with an initial exchange premium of 20% at a reoffered price of 99.
The notes were talked at a coupon of 2.75% to 3.25%, an initial exchange premium of 20% to 25% and a reoffered price of 99. They priced after the market closed.
The notes are issued by Kilroy operating partnership Kilroy Realty LP and are exchangeable into the listed company's common stock. Kilroy Realty Corp. is also guaranteeing the notes.
There is an over-allotment option for an additional $60 million.
JP Morgan, Banc of America and Lehman Brothers were the bookrunners of the Rule 144A offering.
The exchangeables are non-callable and may not be put.
There is a contingent exchange hurdle at 130% of the exchange price.
The notes have standard dividend and takeover protection.
Kilroy, a Los Angeles-based real estate investment trust that focuses on office and industrial real estate in southern California suburban markets, said the proceeds of the deal will be used to fund capped call transactions, to reduce a $550 million unsecured revolving debt, to repay outstanding mortgage debt, to partly finance its development pipeline and to fund general purposes.
| Issuer: | Kilroy Realty LP
|
| Issue: | Exchangeable senior unsecured notes
|
| Exchange property: | Kilroy Realty Corp. common stock
|
| Bookrunners: | JP Morgan, Banc of America and Lehman Brothers
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | April 15, 2012
|
| Coupon: | 3.25%
|
| Price: | Par, reoffered at 99
|
| Yield: | 3.25%
|
| Exchange premium: | 20%
|
| Exchange price: | $88.04
|
| Exchange ratio: | 11.3580
|
| Contingent exchange: | 130%
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 2.75%-3.25%, up 20%-25%, reoffered at 99
|
| Pricing date: | March 27, after the close
|
| Settlement date: | April 2
|
| Distribution: | Rule 144A
|
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