NorthStar Realty plans $300 million 20-year exchangeables to yield 4.875%-5.375%, up 10%-15%

By Rebecca Melvin

New York, June 12 - NorthStar Reality Finance LP, a subsidiary of NorthStar Realty Finance Corp., plans to price $300 million of 20-year exchangeable senior notes after the market close Thursday that were talked to yield 4.875% to 5.375% with an initial conversion premium of 10% to 15%, according to market sources.

The Rule 144A deal has a $45 million greenshoe and was being marketed by joint bookrunning managers Deutsche Bank Securities Inc., Citigroup Global Markets Inc., UBS Investment Bank, Barclays and J.P. Morgan Securities LLC.

The exchangeables will be net share settled. They are non-callable until June 15, 2020 and then are provisionally callable until June 15, 2023 at a make-whole redemption price if the closing sale price of NorthStar's common stock has been at least 130% of the exchange price for 20 out of 30 trading days.

Holders may put the exchangeables on June 15, 2023 and June 15, 2028.

The paper has dividend protection for cash dividends paid above $0.19 per quarter and has takeover protection.

Proceeds are earmarked for investments, including pending acquisition of limited partnership interests in up to 25 real estate private equity funds, to repurchase or pay its liability, and for general corporate purposes.

NorthStar is a New York-based real estate investment trust.

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