By Rebecca Melvin
New York, Nov. 16 - Kilroy Realty LP, the operating partnership of Kilroy Realty Corp., priced $150 million of five-year exchangeable senior notes after the close of markets Monday to yield 4.25% with an initial conversion premium of 17.5%, according to a syndicate source.
The Rule 144A offering has a greenshoe of $22.5 million, and was sold via joint bookrunners J.P. Morgan Securities Inc. and Bank of America Merrill Lynch.
The senior unsecured notes priced at the cheap end of talk, which was 3.75% to 4.25% for the coupon, with 17.5% to 22.5% for the initial conversion premium.
The notes will be guaranteed by the company on a senior unsecured basis. They will be non-callable for life with no puts. There is takeover and dividend protection.
The operating partnership planned to enter into capped call transactions with affiliates of certain initial purchasers of the notes. The capped call transactions were expected to reduce potential dilution upon exchange of the notes.
Proceeds of the offering are earmarked to repay debt, for general corporate purposes, and to purchase the call spread.
Los Angeles-based Kilroy owns, operates, and develops suburban office and industrial real estate in southern California.
| Issuer: | Kilroy Realty LP
|
| Exchange entity: | Kilroy Realty Corp. |
|
| Issue: | Exchangeable senior notes
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Maturity: | 2014
|
| Bookrunners: | JP Morgan and Bank of America Merrill Lynch
|
| Coupon: | 4.25%
|
| Price: | Par, $1,000
|
| Yield: | 4.25%
|
| Conversion premium: | 17.5%
|
| Conversion price: | $35.93
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | Yes
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Price talk: | 3.75%-4.25%, up 17.5%-22.5%
|
| Pricing date: | Nov. 16
|
| Settlement: | Nov. 20 |
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: KRC
|
| Stock reference price: | $30.58
|
| Market capitalization: | $1.32 billion
|
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