By Abigail W. Adams
Portland, Me., May 9 – Welltower OP LLC priced an upsized $900 million of five-year notes (Baa1) exchangeable for Welltower Inc. common shares after the market close on Monday at par with a coupon of 2.75% 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 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, which carries an upsized greenshoe of $135 million.
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.
| Issuer: | Welltower OP LLC
|
| Amount: | $900 million
|
| Greenshoe: | $135 million
|
| Issue: | Exchangeable senior notes
|
| Maturity: | May 15, 2028
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC and BofA Securities Inc.
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Exchange premium: | 25%
|
| Exchange price: | $95.41
|
| Exchange rate: | 10.4808
|
| Call options: | Non-callable until May 20, 2026 and then subject to a 130% hurdle
|
| Pricing date: | May 8
|
| Settlement date: | May 11
|
| Rating: | Moody’s: Baa1
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| Distribution: | Rule 144A
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| Talk: | Coupon of 2.25% to 2.75% and initial exchange premium of 22.5% to 27.5%
|
| Stock symbol: | NYSE: WELL
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| Stock price: | $76.33 at market close May 8
|
| Market capitalization: | $37.94 billion
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