Essex Portfolio, L.P., the operating partnership of
Essex Property Trust Inc (
recently priced $300 million worth of senior unsecured notes at
an interest rate of 3.25% per annum. The operating partnership of
the real estate investment trust (REIT) expects to utilize the
net proceeds from the offering to pay off the outstanding debt,
in part or full, under the unsecured credit facilities and for
general corporate purposes.
These notes are scheduled to mature in May, 2023 and were
priced at 99.152% of par value with a yield to maturity of 3.35%.
Notably, the interest is payable semi-annually on the 1st day of
May and Nov each year. The first interest payment is due on Nov
1, 2013. The debt offering is expected to close on Aug 15, 2013,
subject to customary closing conditions.
The joint book-running managers of the offering include
Citigroup, J.P. Morgan Securities LLC of
JPMorgan Chase & Co. (
, Wells Fargo Securities, LLC of
Wells Fargo & Company (
, Mitsubishi UFJ Securities (USA), Inc. and U.S. Bancorp
Investments, Inc of
U.S. Bancorp (
Notably, during fourth quarter 2012, Fitch upgraded Essex
Property's credit rating to BBB+ with a stable outlook from BBB
with a positive outlook. Consequently, the pricing on the
company's Line of Credit and Term Loan was reduced to 107.5 basis
points over Libor and 120 basis points over Libor, respectively.
Also, in Jan 2013, Essex Property expanded its unsecured line of
credit facility capacity from $500 million to $600 million.
We believe that Essex Property's focus on maintaining a
balanced and flexible balance sheet with ample liquidity would
enable it to operate efficiently, tide over the near term
constraints and capitalize on potential acquisition and
investment opportunities. This, in turn, would help augment its
top line. Moreover, paying back of debt would reduce its interest
Based in Palo Alto, Calif., Essex Property acquires, develops,
redevelops and manages apartment communities, primarily in highly
desirable, supply-constrained markets. Essex Property currently
owns 165 multi-family properties with an additional 9 properties
in various stages of development.
Essex Property currently carries a Zacks Rank #2 (Buy).
ESSEX PPTY TR (ESS): Free Stock Analysis
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