) declared a public offering of 27 million shares. Further, the
company anticipates that the underwriters will be provided a
30-day option to buy up to an additional 4 million common shares.
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The proceeds from the offering will be primarily utilized to
redeem nearly $450 million worth of unsecured notes due between
2014 and 2016. CommonWealth announced this in a tender offer
issued concurrently. Further, the remainder of proceeds will be
used for repaying other debt and for general business purposes.
The joint book-running mangers for the offering are
), Merrill Lynch - a wing of
Bank of America Corporation
) and UBS Investment Bank. Further, Jefferies Group, Inc. and RBC
Capital Markets are acting as joint lead managers for the
Earlier in 2012, CommonWealth had announced a public offering of
$175 million of 5.75% unsecured senior notes due Aug 1, 2042. The
proceeds from these were utilized for redeeming 6 million shares
of 7 1/8% Series C Cumulative preferred shares and partially
funded the acquisitions completed in the third quarter of 2012.
For CommonWealth, though the public offering would result in
share dilution, the repayment of debt is encouraging, as it would
reduce interest expenses. In 2012, interest expenses (including
net amortization of debt discounts and deferred financing fees)
were $204.2 million, up 4.7% year-over-year. Further, as of Dec
31, 2012, senior unsecured debt was nearly $3.0 billion, rising
4.5% from Dec 31, 2011.
Currently, CommonWealth retains a Zacks Rank #3 (Hold).