WASHINGTON (dpa-AFX) - Realty Income Corp. (O) on Tuesday announced plans to offer $750 million aggregate principal amount of convertible senior notes due 2031 in a private offering.
The company expects to grant initial purchasers a 13-day option to purchase up to an additional $112.5 million of notes.
The notes will be senior, unsecured obligations of the company, with interest payable semiannually.
The interest rate, initial conversion rate and other terms will be determined when the offering is priced.
The company intends to use part of the proceeds to fund capped call transactions and to repurchase shares of its common stock concurrently with the pricing of the notes.
The company plans to use the remaining proceeds for general corporate purposes, including debt repayment or repurchases, hedging activities, property development, redevelopment and acquisitions, business combinations, and portfolio improvements.
The capped call transactions are expected to reduce potential dilution to the company's common stock upon conversion of the notes and offset certain potential cash payments above the principal amount.
The notes will generally not be redeemable before August 20, 2029, except for certain cleanup and REIT preservation redemptions.
Realty Income Corp. is trading in the overnight at 0.15% higher, $61.98 on the New York Stock Exchange.
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