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Corporate Office greenshoe exercised, lifts 5.25% exchangeable notes to $345 million
By William Gullotti
Buffalo, N.Y., Sept. 14 – The initial purchasers of Corporate Office Properties, LP’s 5.25% five-year exchangeable notes exercised their $45 million over-allotment option in full, bumping the total deal size to $345 million, according to an 8-K filing with the Securities and Exchange Commission.
As previously reported, Corporate Office priced $300 million of the exchangeable notes after the market close on Sept. 7 with an initial exchange premium of 22.5%. The exchangeables are guaranteed by Corporate Office Properties Trust on a senior unsecured basis.
Pricing came in at the cheap end of talk for a coupon of 4.75% to 5.25% and an initial exchange premium of 22.5% to 27.5%, according to a market source.
Wells Fargo Securities LLC was sole bookrunner for the Rule 144A offering.
The notes are non-callable until Sept. 21, 2026 and then subject to a 130% hurdle or are freely callable if deemed necessary to preserve the company’s status as a REIT.
They are putable upon a fundamental change.
There is dividend protection above 28.5 cents a share.
The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both at the company’s option.
With the greenshoe fully exercised, net proceeds were approximately $336 million.
Proceeds will be used for general corporate purposes, which may include the redemption or repayment of debt and the pre-funding of future development investments.
Corporate Office Properties Trust is a Columbia, Md.-based office and data center real estate investment trust.
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