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First Potomac Reaps $104.9M - Analyst Blog
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.
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 costs.
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 ( WFC ) and KeyBanc Capital Markets of KeyCorp ( KEY ) served as joint book-running managers. On the other hand, Morgan Stanley ( MS ), BMO Capital Markets and a number of other companies acted as co-lead managers.
Currently, First Potomac carries a Zacks Rank #3 (Hold).
FIRST POTOMAC (FPO): Free Stock Analysis Report
KEYCORP NEW (KEY): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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