New Issue: Realty Income details upsized $750 million of 5.625% 10-year notes

By Mary-Katherine Stinson and Cristal Cody

Lexington, Ky., Oct. 4 – Realty Income Corp. detailed its $750 million offering of 5.625% 10-year senior notes to include the call features, the spread and an updated list of bookrunners, managers and co-managers, according to a FWP filed with the Securities and Exchange Commission.

The notes feature a make-whole call plus 30 basis points until three months before maturity. On or after July 13, 2032, they are callable at par.

The spread was Treasuries plus 200 bps. Talk was in the 225 bps area.

As previously reported, the notes priced at 99.879 to yield 5.641% on Monday.

The deal was upsized from $400 million.

Proceeds are intended for general corporate purposes, which may include the repayment or repurchase of debt including borrowings under revolving credit facilities or commercial paper programs, foreign currency or interest rate swaps or other hedging instruments, the development and acquisition of additional properties and other acquisition or business combination transactions and the expansion and improvement of certain properties.

In conjunction with this offering, the company executed a $600 million U.S. dollar-to-euro 10-year cross currency swap, resulting in an anticipated receipt of approximately €612 million in proceeds and an effective fixed-rate, euro-denominated semi-annual yield to maturity of about 4.7%.

Additionally, the company terminated forward starting interest rate swaps totaling $500 million in notional value previously entered into, recognizing a cash settlement gain of approximately $72 million.

Giving effect to these contemporaneous transactions, Realty Income expects to recognize an effective semi-annual yield to maturity of approximately 3.93% on the overall transaction.

The real estate investment trust is based in San Diego.

Issuer:	Realty Income Corp.
Issue:	Senior notes
Amount:	$750 million
Maturity date:	Oct. 13, 2032
Joint bookrunners:	Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, BofA Securities, Inc., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC
Senior co-managers:	BMO Capital Markets Corp., Citizens Capital Markets, Inc. and Huntington Securities, Inc.
Co-Lead Managers:	BBVA Securities Inc., BNY Mellon Capital Markets, LLC, PNC Capital Markets LLC, Regions Securities LLC and Truist Securities, Inc
Co-managers:	Comerica Securities, Inc., Samuel A. Ramirez & Co., Inc., UBS Securities LLC, Academy Securities, Inc. and Loop Capital Markets LLC
Trustee:	Bank of New York Mellon Trust Co.
Counsel to issuers:	Latham & Watkins LLP with Venable LLP counseling on Maryland law
Counsel to underwriters:	Sidley Austin LLP
Coupon:	5.625%
Price:	99.879
Yield:	5.641%
Spread:	Treasuries plus 200 bps
Call features:	Make-whole at Treasuries plus 30 bps; starting July 13, 2032 at par
Pricing date:	Oct. 3
Settlement date:	Oct. 13
Cusip:	756109BP8
Price talk:	Treasuries plus 225 bps area

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