Welltower talks $750 million five-year exchangeable notes to yield 2.25%-2.75%, up 22.5%-27.5%

By Abigail W. Adams

Portland, Me., May 8 – Welltower OP LLC plans to price a $750 million offering of five-year exchangeable notes (Baa1) after the market close on Monday with price talk for a coupon of 2.25% to 2.75% and 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. are bookrunners for the Rule 144A deal, which carries a greenshoe of $112.5 million.

The notes are exchangeable for Welltower Inc. common shares.

The exchangeables are non-callable for three years 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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