Welltower greenshoe exercised in full, lifts 2.75% five-year exchangeables to $1.04 billion

By Wendy Van Sickle

Columbus, Ohio, May 11 – The underwriters for Welltower OP LLC’s five-year notes (Baa1) exchangeable for Welltower Inc. common shares exercised their full $135 million greenshoe, increasing the total deal size to $1,035,000,000, according to a company news release.

The company priced an initial $900 million of the convertibles after the market close on Monday at par with a coupon of 2.75% and an initial exchange premium of 25%.

Pricing came at the cheap end of talk for a coupon of 2.25% to 2.75% and at the midpoint of talk for an initial exchange premium of 22.5% to 27.5%, according to a market source.

Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC and BofA Securities Inc. were bookrunners for the Rule 144A deal.

The initial size of the offering was $750 million with a greenshoe of $112.5 million.

The exchangeables are non-callable until May 20, 2026 and then subject to a 130% hurdle.

The notes will be settled in cash up to the principal amount with any excess to be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used for general corporate purposes, which may include the repayment or redemption of the company’s 4.5% senior notes due Jan. 15, 2024 and 3.625% senior notes due March 15, 2024 and investment in health care, wellness and senior housing properties.

Welltower is a Toledo, Ohio-based real estate investment trust focused on senior housing and post-acute and outpatient medical properties.

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