In order to reduce the debt level and boost liquidity
Alexandria Real Estate Equities, Inc.
) priced a public offering of $500 million worth of 3.900% Senior
Notes at 99.712% of the principal amount. The transaction will
likely be completed by Jun 7, subject to customary closing
The notes, which are scheduled to mature in 2023, contain a
yield to maturity of 3.935%. Notably, the notes will be
entirely and unconditionally guaranteed by a wholly owned
ancillary of the company - Alexandria Real Estate Equities,
In particular, Alexandria Real Estate plans to utilize the
fund generated from the offering to pay off in advance $150
million of the $750 million worth outstanding unsecured senior
bank term loan, due 2016. This will shrink the Alexandria Real
Estate's outstanding debt under the unsecured senior credit line
to zero. Moreover, the company expects to use the remaining
amount for investment in planned developments and redevelopments,
proposed acquisitions as well as for meeting other corporate
A consortium of banking giants - such as J.P. Morgan
Securities LLC of
Chase & Co.
), Barclays Capital Inc., Goldman, Sachs & Co. of
The Goldman Sachs Group, Inc.
) and PNC Capital Markets LLC of
The PNC Financial Services Group, Inc.
) - acted as the joint book-running managers for the company's
As of Mar 31, 2013, Alexandria Real Estate had cash and cash
equivalents worth $87.0 million, up from $77.4 million as of Mar
31, 2012. The move will help the company to lower its debt and
reduce interest expenses. Moreover, increased financial
flexibility will position the company well to pursue investment
opportunities and acquisitions, which will go a long way in
enhancing its top-line growth.
Lately, the company has been dedicated toward reducing its
outstanding debt level under its unsecured senior line of credit.
In connection to this, earlier this month, the company sold a
total of 7.6 million common shares at $73.50 per share and
obtained net proceeds of about $535.5 million (excluding payment
of underwriting discounts and commissions).
Currently, Alexandria Real Estate carries a Zacks Rank #3
ALEXANDRIA REAL (ARE): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
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