NorthStar sets final exchange consideration in 7.5% exchangeables offer

By Jennifer Chiou

New York, March 25 - NorthStar Realty Finance Corp. announced the final exchange consideration in its offer for the $172.5 million of 7.5% exchangeable senior notes due 2031 issued by NorthStar Realty Finance LP, the company's operating partnership.

According to a filing with the Securities and Exchange Commission, the company will issue $2,789.21 of new 3% senior notes due 2014 in exchange for each $1,000 principal amount of 7.5% notes.

As reported, effective March 6, the conversion ratio was changed to 170.4790 instead of 168.8130. NorthStar was required to recalculate the amount after announcing a March 14 cash dividend of $0.25 per share.

The final exchange consideration per $1,000 principal amount is equal to 102% of the product of (1) 170.4790 multiplied by (2) $16.0402, the average of the daily volume-weighted average prices of the company's common stock over the 15 consecutive trading-day period beginning on March 5 and ending on March 25.

As previously announced, the company began the exchange offer on Feb. 28.

The offer will end at 11:59 p.m. ET on March 27.

The company previously said it plans to spin off its asset management business through a distribution of NorthStar Asset Management Group Inc. common stock to its stockholders.

The new notes will not reference, and may not be repaid in, shares of NorthStar Asset Management, the company said.

The company said that regardless of participation in the proposed exchange offer, holders of record of the 7.5% exchangeables on March 1 will receive the interest payment of $37.50 per note on March 17 unless they have exchanged the 7.5% notes.

The company said it will not receive any proceeds as a result of the proposed exchange offer.

The new notes may be called for cash at any time prior to maturity, the press release noted.

At maturity, holders of the new notes will receive, at the company's election, in addition to the interest payment, either cash or shares of the company's common stock.

If the company elects the share option, the number of shares likely will be determined by using the daily volume-weighted average prices of the company's common stock on the New York Stock Exchange during a 20 consecutive trading-day period beginning 23 scheduled trading days prior to maturity.

Deutsche Bank Securities (844 758-6740) is the dealer manager. Global Bondholder Services Corp. (banks and brokers call 212 430-3774; others call 866 924-2200) is the information agent and the exchange agent.

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

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