Published on 12/9/2020 in the Prospect News Investment Grade Daily.
New Issue: Realty Income sells $725 million fixed-rate senior notes in two parts
By Cristal Cody
Tupelo, Miss., Dec. 9 – Realty Income Corp. priced $725 million of senior notes (A3/A-) in two tranches on Wednesday, according to an FWP filing with the Securities and Exchange Commission.
A $325 million tranche of 0.75% notes due March 15, 2026 priced at 99.192 to yield 0.908%. The notes priced with a spread of 50 basis points over Treasuries.
The company sold $400 million of 1.8% notes due March 15, 2033 at 98.47 to yield 1.941%, or Treasuries plus 100 bps.
Wells Fargo Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, TD Securities (USA) LLC, Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, RBC Capital Markets, LLC, BofA Securities, Inc., Regions Securities LLC and U.S. Bancorp Investments, Inc. were the bookrunners.
Proceeds will be used to redeem all $950 million of the company’s 3.25% notes due 2022 and for general corporate purposes, including acquisitions, improvements of existing properties and repaying borrowings under its $3 billion revolving credit facility and/or its $1 billion commercial paper program.
The real estate investment trust is based in San Diego.
| Issuer: | Realty Income Corp.
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| Amount: | $725 million
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| Description: | Senior notes
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| Bookrunners: | Wells Fargo Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, TD Securities (USA) LLC, Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, RBC Capital Markets, LLC, BofA Securities, Inc., Regions Securities LLC and U.S. Bancorp Investments, Inc.
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| Co-lead managers: | BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, Morgan Stanley & Co. LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., Stifel, Nicolaus & Co., Inc., Truist Securities, Inc. and UBS Securities LLC
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| Senior co-managers: | BNP Paribas Securities Corp., Comerica Securities, Inc., Moelis & Co. LLC and Samuel A. Ramirez & Co., Inc.
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| Co-managers: | Academy Securities, Inc., Berenberg Capital Markets LLC, Evercore Group LLC, MUFG and Siebert Williams Shank & Co., LLC
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| Trade date: | Dec. 9
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| Settlement date: | Dec. 14
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| Ratings: | Moody’s: A3
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| S&P: A-
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| Distribution: | SEC registered
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| Notes due 2026
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| Amount: | $325 million
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| Maturity: | March 15, 2026
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| Coupon: | 0.75%
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| Price: | 99.192
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| Yield: | 0.908%
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| Spread: | Treasuries plus 50 bps
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| Call features: | Make-whole call before Feb. 15, 2026 at greater of par and Treasuries plus 10 bps; thereafter at par
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| Notes due 2033
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| Amount: | $400 million
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| Maturity: | March 15, 2033
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| Coupon: | 1.8%
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| Price: | 98.47
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| Yield: | 1.941%
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| Spread: | Treasuries plus 100 bps
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| Call features: | Make-whole call before Dec. 15, 2032 at greater of par and Treasuries plus 15 bps; thereafter at par
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