8-KFinancial EventsOther EventsExhibits & Filings

ESSEX PROPERTY TRUST, INC. 8-K Report, Financial Obligation (Mar 20, 2012)

Filed March 20, 2012For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) announced a significant financing event through its operating partnership, Essex Portfolio, L.P., with the issuance of $200 million in aggregate principal amount of Senior Guaranteed Notes across three series (Series C, D, and E) maturing in 2021. These notes carry interest rates ranging from 4.27% to 4.37% and are guaranteed by the parent company, Essex Property Trust, Inc. The issuance is structured in three separate closings occurring between April and September 2012, subject to customary conditions. This financing provides Essex with substantial long-term capital, enhancing its financial flexibility for potential growth or operational needs. The unsecured nature of the debt, backed by a full guarantee from the parent, is a key feature for investors to consider when assessing the company's leverage and credit profile. The press release also indicates the company's proactive approach to capital management.

Key Highlights

  • 1Essex Portfolio, L.P. is issuing $200 million in Senior Guaranteed Notes in three tranches (Series C, D, and E).
  • 2The notes mature in 2021 and have fixed interest rates between 4.27% and 4.37%.
  • 3The issuance is a private placement under a Note Purchase Agreement dated March 14, 2012.
  • 4Essex Property Trust, Inc. provides a full and unconditional guarantee for these notes.
  • 5The closings for the note issuances are scheduled to occur between April and September 2012.
  • 6The company has the option to prepay the notes, subject to a 'Make-Whole Amount' if prepaid more than 90 days before maturity.
  • 7The financing is intended to provide long-term capital for the operating partnership.

Frequently Asked Questions

Essex Portfolio, L.P. is issuing a total of $200 million in Senior Guaranteed Notes across three series: Series C ($100 million at 4.27% due April 30, 2021), Series D ($50 million at 4.30% due June 29, 2021), and Series E ($50 million at 4.37% due August 30, 2021). All notes have a nine-year term.

The guarantee from Essex Property Trust, Inc. means the parent company is fully and unconditionally liable for the debt obligations of its operating partnership. This provides a higher level of security for the noteholders and indicates the parent company's commitment to the debt, which is a crucial factor for investors assessing the overall credit risk of Essex.

The issuance is structured in three closings. The Series C Notes are expected to close between April 30, 2012, and May 2, 2012. The Series D Notes are expected to close between June 29, 2012, and July 3, 2012. The Series E Notes are expected to close between August 30, 2012, and September 4, 2012. The exact timing depends on the satisfaction of certain conditions.

Yes, the Operating Partnership is permitted to prepay all or any part of the outstanding Notes at any time. However, if a Note is prepaid sooner than 90 days before its maturity date, a 'Make-Whole Amount' will be due in addition to accrued interest. This amount essentially compensates the noteholders for the early repayment.