By Abigail W. Adams
Portland, Me., March 18 – Kite Realty Group Trust priced $175 million of six-year exchangeable notes (Baa3) after the market close on Wednesday at par with a coupon of 0.75% and an initial exchange premium of 25%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 0.25% to 0.75% and an initial exchange premium of 25% to 35%, according to a market source.
Barclays (lead left), BofA Securities Inc. and KeyBanc Capital Markets Inc. were underwriters for the Rule 144A offering, which carries a greenshoe of $25 million.
The notes will be issued by Kite Realty Group LP and exchangeable for Kite Realty Group shares.
The notes are non-callable until April 5, 2025 and then subject to a 130% hurdle.
The notes will be settled in cash, shares or a combination of both.
In connection with the offering, the company entered into capped call transactions with a cap price of $30.26, which represents a premium of 50% over the last reported sales price of stock.
Net proceeds are expected to be $169.7 million or will be $194.1 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, to repay debt and for general corporate purposes.
Kite Realty is an Indianapolis-based retail focused real estate investment trust.
| Issuer: | Kite Realty Group LP
|
| Securities: | Exchangeable notes
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| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | April 1, 2027
|
| Bookrunners: | Barclays (lead left), BofA Securities Inc. and KeyBanc Capital Markets Inc.
|
| Coupon: | 0.75%
|
| Price: | Par
|
| Yield: | 0.75%
|
| Exchange premium: | 25%
|
| Exchange price: | $25.21
|
| Exchange rate: | 39.6628
|
| Call options: | Non-callable until April 5, 2025 and then subject to a 130% hurdle
|
| Pricing date: | March 17
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| Settlement date: | March 22
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| Rating: | Moody’s: Baa3
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.25% to 0.75% and initial exchange premium of 25% to 35%
|
| Stock symbol: | NYSE: KRG
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| Stock price: | $20.17 at market close March 18
|
| Market capitalization: | $1.7 billion
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