Summary
Essex Property Trust, Inc. (ESS) and its operating partnership, Essex Portfolio, L.P., announced on April 11, 2016, the issuance of $450 million in aggregate principal amount of 3.375% Senior Notes due 2026. The net proceeds from this offering are approximately $444.0 million, after accounting for underwriters' discounts and offering expenses. These funds are earmarked to repay existing indebtedness under the operating partnership's unsecured line of credit facilities and for general corporate and working capital needs.
Key Highlights
- 1Essex Portfolio, L.P. issued $450 million of 3.375% Senior Notes due April 15, 2026.
- 2The notes are guaranteed by the parent company, Essex Property Trust, Inc.
- 3Net proceeds of approximately $444.0 million will be used to repay existing credit facilities and for general corporate purposes.
- 4The notes are general unsecured senior obligations, ranking equally with other senior unsecured debt but subordinate to secured debt and subsidiary liabilities.
- 5The notes carry an interest rate of 3.375% per annum, payable semi-annually.
- 6The company has the option to redeem the notes prior to maturity under specific conditions and at a premium before January 15, 2026.
- 7The indenture includes covenants that restrict mergers, asset sales, and the incurrence of additional debt.
Frequently Asked Questions
The primary purpose is to refinance existing debt under the company's unsecured line of credit facilities and to provide funds for general corporate and working capital purposes. This aims to strengthen the company's balance sheet and manage its debt structure.
The new notes have a fixed interest rate of 3.375% per annum and mature on April 15, 2026. Interest payments are made semi-annually.
These are unsecured senior obligations of Essex Portfolio, L.P. They rank equally with other senior unsecured debt but are effectively subordinated to any secured indebtedness of the operating partnership and to liabilities of its subsidiaries.
The indenture includes covenants that limit the operating partnership's ability to engage in mergers, consolidate, or sell substantially all of its assets. It also places limitations on the incurrence of additional secured and unsecured indebtedness.