Kilroy Realty Corp.'s operating partnership priced an underwritten public offering of $425.0 million of its 3.450% senior notes due 2024.
The notes were priced at 99.870%, with a yield to maturity of 3.471%.
The offering is expected to generate net proceeds of roughly $421.0 million and is anticipated to close Dec. 11.
The company plans to use the net proceeds to redeem all $325.0 million of the operating partnership's outstanding 4.800% senior notes due 2018 and use the balance of the proceeds for general business purposes, which may include financing development projects, purchasing land and properties and repaying other outstanding debt.
The redemption date for the outstanding 4.800% senior notes will be Dec. 27. The redemption price will equal 100% of the principal amount and a make-whole amount calculated in accordance with the indenture governing the notes, plus applicable interest.
As a result of the redemption, Kilroy anticipates incurring a one-time charge of roughly $5.5 million to net income and funds from operations in the fourth quarter.
J.P. Morgan, US Bancorp, Barclays, BofA Merrill Lynch and Wells Fargo Securities served as joint book-running managers for the offering while BBVA, Citigroup and SMBC Nikko acted as senior co-managers.
BNP PARIBAS, Comerica Securities, KeyBanc Capital Markets, MUFG, PNC Capital Markets LLC, RBC Capital Markets and Scotiabank acted as co-managers.
