First Potomac Realty Trust
) recently generated net proceeds of approximately $104.9 million
from an equity offering of nearly 7.5 million shares. The move
comes as part of its efforts to infuse capital and repay debt.
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In particular, First Potomac closed the offering of 7,475,000
common shares (including 975,000 common shares issued and sold
pursuant to the exercise of the underwriters' option to acquire
additional common shares in full) at a price of $14.70 per share.
This helped the company reap $104.9 million as net proceeds after
the deduction of the underwriting discount and estimated offering
First Potomac will use this fund primarily for repayment of the
outstanding debt under secured term loans and part of the
outstanding debt under its unsecured revolving credit facility.
In addition, the company plans to utilize the amount for meeting
other corporate needs.
We believe that though this public offering leads to share
dilution for First Potomac, the repayment of debt is a strategic
fit as it would reduce its interest expenses. Also, an increase
in financial flexibility through this offering would poise the
company well for investment and acquisition prospects.
Several major banks helped First Potomac in this equity offering.
Wells Fargo Securities of
Wells Fargo & Company
) and KeyBanc Capital Markets of
) served as joint book-running managers. On the other hand,
), BMO Capital Markets and a number of other companies acted as
Currently, First Potomac carries a Zacks Rank #3 (Hold).