Realty Income to repay $1.1 billion revolver debt via notes due 2027

By Susanna Moon

Chicago, Oct. 4 – Realty Income Corp. plans to repay $1.1 billion of debt outstanding under its $2 billion revolving credit facility due June 30, 2019 using proceeds of a new notes issue.

The company plans to price an offering of senior notes due 2027, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds also will be used to fund potential investment opportunities or for other general corporate purposes.

The revolver includes two six-month extension options.

As of Sept. 30, the weighted average interest rate of borrowings under the revolver was about 1.4% per year.

Interest under the revolver is Libor plus 90 basis points with a facility commitment fee of 15 bps, for all in drawn pricing of 105 bps over Libor.

If the company’s credit rating is lower than BBB–/Baa3 or its senior unsecured debt is unrated, interest would be Libor plus 155 bps. If the credit rating is A-/A3 or higher, the rate would be Libor plus 85 bps.

The commitment fee is 30 bps for a rating lower than BBB–/Baa3 or 12.5 bps for a credit rating of A-/A3 or higher.

Interest on drawdowns under the company’s $70 million term loan and $250 million term loan are also subject to adjustment based on changes to the company’s credit ratings.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

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