Essential Properties prices $450M notes, plans to repay $420M in credit borrowings
- Essential Properties Realty Trust (EPRT) priced a $450M offering of 4.375% exchangeable senior notes due 2032, with an option for initial purchasers to buy up to an additional $67.5M of notes.
- The notes are expected to settle on October 30 and will be issued by Essential Properties, L.P., with a senior unsecured guarantee from EPRT.
- The notes carry an annual interest rate of 4.375%, payable semi-annually, and mature on January 15, 2032. The initial exchange price is ~$30.88 per share, a 15% premium to EPRT's October 27 closing price of $26.85.
- The partnership expects net proceeds of $439M, or $505.2M if the additional-notes option is exercised, primarily to repay $420.3M in revolving credit borrowings and fund $18.7M in capped-call transactions. The capped calls carry a $36.25 per-share cap price, a 35% premium to the October 27 closing price, and are intended to limit potential dilution.
- Noteholders can exchange the notes under specified conditions before October 15, 2031, and at their election thereafter. The offering is restricted to qualified institutional buyers.
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