SL Green to sell $500 million 20-year exchangeables in overnight offering, to yield 3%, up 25%

By Kenneth Lim

Boston, March 20 - SL Green Realty Corp. planned to sell $500 million of 20-year exchangeable senior notes at a coupon of 3% and an initial exchange premium of 25% in an overnight deal that will trade on Wednesday.

The notes will be issued by SL Green's operating partnership, SL Green Operating Partnership LP, and exchangeable into the listed company's common stock.

There is an over-allotment option for a further $75 million.

Citigroup was the bookrunner of the Rule 144A offering.

The notes are non-callable for the first five years. They may be put in years five, 10 and 15.

There is a contingent conversion trigger at 130% of the conversion price.

The notes have dividend and takeover protection.

There is a net-share settlement feature.

SL Green, a New York-based real estate investment trust that focuses on Manhattan commercial properties, said the proceeds of the deal will be used to repay existing debt, to invest in additional properties, to buy back its common stock and to fund general purposes.

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