Kilroy greenshoe exercised, lifting 3.25% exchangeables to $460 million

By Angela McDaniels

Seattle, April 11 - Kilroy Realty Corp. said the underwriters of its offering of 3.25% exchangeable senior unsecured notes due 2012 exercised their $60 million over-allotment option in full, raising the size of the deal to $460 million.

The company originally priced $400 million of the notes at a reoffered price of 99 with an initial exchange premium of 20% and an exchange price of $88.04 via JPMorgan, Banc of America and Lehman Brothers on March 27.

The notes were issued by Kilroy operating partnership Kilroy Realty LP and are exchangeable into Kilroy Realty Corp. common stock.

Kilroy, a Los Angeles-based real estate investment trust that focuses on office and industrial real estate in southern California suburban markets, said the proceeds of the deal will be used to fund capped call transactions, to reduce a $550 million unsecured revolving debt, to repay outstanding mortgage debt, to partly finance its development pipeline and for general purposes.

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