By Kenneth Lim
Boston, July 21 - Essex Property Trust Inc. early Friday priced $130 million of convertible preferred shares at the cheap end of talk, at a dividend of 4.875% and an initial conversion premium of 18%.
The 5.2 million preferreds were offered at par of $25, and price talk for the overnight deal was for a dividend between 4.375% and 4.875% and an initial conversion premium between 18% and 22%. The initial conversion price is $136.62 per common share. Essex common stock (NYSE: ESS) closed at $115.78 on Thursday.
There is a greenshoe for a further 780,000 preferred shares worth $19.5 million.
Banc of America Securities LLC was the bookrunner of the registered deal.
The preferreds are non-callable for the first five years, after which they may be called subject to a 130% hurdle.
There will be dividend protection for payouts on the common above the current 84 cents per quarter.
Essex, a Palo Alto, Calif.-based real estate investment trust, has a portfolio of residential properties on the West Coast. It will use the proceeds of the deal to pay down its outstanding debt that currently bear a blended interest rate of 5.76%, to fund its development pipeline and for general purposes.
| Issuer: | Essex Property Trust Inc.
|
| Issue: | Convertible preferred stock
|
| Bookrunner: | Banc of America Securities LLC
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| Amount: | $130 million
|
| Greenshoe: | $19.5 million
|
| Maturity: | Perpetual
|
| Dividend: | 4.875%
|
| Price: | Par of $25
|
| Yield: | 4.875%
|
| Conversion premium: | 18%
|
| Conversion price: | $136.62
|
| Conversion ratio: | 0.183
|
| Dividend protection: | For common stock dividends above 84 cents per quarter
|
| Call protection: | Non-callable 5 years, thereafter callable subject to 130% hurdle
|
| Price talk: | 4.375%-4.875%, up 18%-22%
|
| Pricing date: | July 21, before the open
|
| Settlement date: | July 26
|
| Distribution: | Registered
|
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