iStar Financial adds 10-year tranche, upsizes notes offering to $400 million; issues price talk

By Paul A. Harris

St. Louis, Dec. 4 - iStar Financial Inc. upsized its senior notes offering (Ba1/BB+) to $400 million from $250 million by adding a $150 million 10-year tranche to its previously announced deal, according to a syndicate source. Pricing is expected on Friday morning.

The New York City-based commercial real estate finance company now plans to price $250 million of notes due 2010. The notes will be callable with a Treasuries plus 50 basis points make-whole call. Price talk is for a yield of 6 1/8%-6¼%.

iStar also plans to price $150 million of notes due 2013. The 10-year notes will be non-callable for five years and will contain a three-year 35% equity clawback. Price talk is for a yield of 6 5/8%-6¾%.

Deutsche Bank Securities is the bookrunner on the public offering. Banc of America Securities is co-lead. The co-managers are Bear, Stearns & Co., Fleet Securities, Goldman, Sachs & Co. and Lehman Brothers.

iStar will use proceeds to repay existing debt.

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