Equity Residential $50 million greenshoe fully exercised for total of $650 million exchangeable notes

By Laura Lutz

Des Moines, Aug. 23 - Equity Residential announced that the underwriters in its offering of 3.85% exchangeable senior notes due 2026 fully exercised their greenshoe for $50 million, bringing the total deal size to $650 million.

The notes were issued by Equity Residential's subsidiary, ERP Operating LP. They are exchangeable into common stock of Equity Residential.

The notes were offered at a price of 98.75 and an initial exchange premium of 28.04% on Aug. 17.

The deal was upsized from an original offer of $500 million.

Merrill Lynch was the bookrunner for the registered off-the-shelf offering.

The notes are non-callable for the first five years, with puts in years five, 10 and 15.

There is a contingent exchange hurdle at 130% of the exchange price.

The notes have dividend and takeover protection.

Equity Residential said it will use the proceeds of the deal to pay down its outstanding revolving credit facilities. Equity Residential is a Chicago-based real estate investment trust that develops and operates apartment properties in the United States.

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