8-KMaterial AgreementsShareholder MattersCorporate Changes+2

ESSEX PROPERTY TRUST, INC. 8-K Report, Material Agreement (Apr 13, 2011)

Filed April 13, 2011For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) has filed an 8-K detailing the successful completion of a preferred stock offering on April 13, 2011. The company issued and sold 2,600,000 shares of its 7.125% Series H Cumulative Redeemable Preferred Stock at a public offering price of $25.00 per share, raising significant capital. An additional option for underwriters to purchase up to 390,000 shares to cover over-allotments was also granted, indicating strong demand. This issuance, facilitated by an underwriting agreement with Wells Fargo Securities and Raymond James & Associates, aims to bolster the company's financial structure. The Series H Preferred Stock holds senior ranking over common stock and parity with existing preferred series, offering investors a fixed dividend of 7.125% annually ($1.78125 per share) payable quarterly. Key features include a $25.00 liquidation preference and specific provisions regarding redemption and conversion rights in the event of a Change of Control, providing a defined risk-reward profile for these new securities.

Key Highlights

  • 1Completion of a $65 million public offering (2.6 million shares at $25.00) of 7.125% Series H Cumulative Redeemable Preferred Stock.
  • 2Underwriting agreement executed with Wells Fargo Securities and Raymond James & Associates as representatives.
  • 3Series H Preferred Stock carries a fixed annual dividend of 7.125%, equivalent to $1.78125 per share, payable quarterly.
  • 4The preferred stock has a liquidation preference of $25.00 per share, senior to common stock.
  • 5Holders have a Change of Control Conversion Right into common stock under specific conditions, unless the company exercises its redemption option.
  • 6Company enacted an amendment to its Operating Partnership agreement to create a Series H Preferred Interest, aligning with the stock issuance.
  • 7The issuance was registered under a Form S-3 shelf registration statement effective March 25, 2010.

Frequently Asked Questions

The primary purpose of this Form 8-K filing was to announce and provide details regarding Essex Property Trust, Inc.'s entry into a material definitive agreement for the issuance and sale of its 7.125% Series H Cumulative Redeemable Preferred Stock, and to report the closing of this offering.

Essex Property Trust raised approximately $65 million from the offering, based on the sale of 2,600,000 shares at $25.00 per share. An additional amount could be raised if underwriters exercise their option for over-allotment shares.

The Series H Preferred Stock pays a fixed cumulative annual dividend of 7.125% ($1.78125 per share), payable quarterly. It has a liquidation preference of $25.00 per share, ranks senior to common stock, and has specific redemption and conversion rights triggered by a Change of Control event. The stock is redeemable by the company generally not before April 13, 2016.

A 'Change of Control' is defined as an acquisition of beneficial ownership of over 50% of the company's voting power by any person or group, followed by a period where the company or its successor is not listed on a major stock exchange (NYSE, NASDAQ, etc.). In such an event, holders of Series H Preferred Stock generally have the right to convert their shares into common stock, unless the company opts to redeem the preferred shares.