8-KMaterial AgreementsFinancial EventsExhibits & Filings

ESSEX PROPERTY TRUST, INC. 8-K Report, Material Agreement (Apr 15, 2013)

Filed April 15, 2013For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) filed an 8-K on April 15, 2013, to report a material agreement. Specifically, its operating partnership, Essex Portfolio, L.P., issued $300 million in aggregate principal amount of 3.25% Senior Notes due 2023. These notes are unsecured and rank equally with other senior unsecured obligations but are effectively subordinated to secured debt. The company, Essex Property Trust, Inc., is providing a full and unconditional guarantee for these notes. The net proceeds from this offering, estimated at approximately $295.2 million after expenses, are intended to repay outstanding balances under the company's unsecured line of credit facilities and for general corporate and working capital purposes. This move indicates a refinancing or debt restructuring strategy by the company to manage its liquidity and capital structure.

Key Highlights

  • 1Essex Portfolio, L.P. issued $300 million of 3.25% Senior Notes due May 1, 2023.
  • 2The notes are general unsecured senior obligations of the Operating Partnership.
  • 3Essex Property Trust, Inc. is the guarantor of the notes.
  • 4Net proceeds of approximately $295.2 million will be used to repay existing credit facilities and for general corporate purposes.
  • 5The notes bear a fixed interest rate of 3.25% payable semi-annually.
  • 6The indenture includes restrictive covenants regarding mergers, asset sales, and additional indebtedness.
  • 7Events of default are detailed, including payment failures, breaches of covenants, and bankruptcy/insolvency events.

Frequently Asked Questions

This 8-K filing is to report the entry into a material agreement, specifically the issuance of $300 million in Senior Notes by Essex Portfolio, L.P., the operating partnership of Essex Property Trust, Inc.

The notes have an aggregate principal amount of $300 million, a fixed interest rate of 3.25% per annum, and a maturity date of May 1, 2023. Interest is payable semi-annually. They are general unsecured senior obligations of the Operating Partnership, guaranteed by Essex Property Trust, Inc.

The net proceeds, estimated at $295.2 million after deducting discounts and expenses, are intended to repay outstanding indebtedness under the Operating Partnership's $600 million unsecured line of credit and its $25 million unsecured working capital line of credit. Remaining funds will be used for general corporate and working capital purposes.

Yes, the indenture governing the notes includes restrictive covenants that limit the Operating Partnership's ability to engage in mergers, consolidate, sell substantially all of its assets, or incur additional secured and unsecured indebtedness.