8-KOther EventsExhibits & Filings

REALTY INCOME CORP 8-K Report, Corporate Update (Oct 19, 2004)

Filed October 19, 2004For Securities:O

Summary

Realty Income Corporation (O) has filed an 8-K report detailing a significant offering of its 7.375% Monthly Income Class D Cumulative Redeemable Preferred Stock. The company entered into a purchase agreement with Credit Suisse First Boston LLC to sell 1,100,000 additional shares, bringing the total outstanding Class D preferred stock to 5,100,000 shares. This offering, priced at $25.4311 per share plus accrued dividends, is expected to generate approximately $27.6 million in net proceeds. Investors should note that these proceeds are earmarked for reducing outstanding debt under the company's $250 million credit facility and for general corporate purposes. The Class D preferred stock carries no maturity date and is redeemable at the company's discretion beginning May 27, 2009. This move indicates a strategy to strengthen the balance sheet and potentially reduce interest expenses by paying down debt.

Key Highlights

  • 1Realty Income Corporation issued 1,100,000 shares of 7.375% Monthly Income Class D Cumulative Redeemable Preferred Stock.
  • 2The offering is priced at $25.4311 per share plus accrued dividends.
  • 3Net proceeds from the offering are estimated to be approximately $27.6 million.
  • 4Proceeds will be used to repay borrowings under the company's $250 million credit facility.
  • 5Remaining proceeds will be used for general corporate purposes.
  • 6The Class D preferred stock has no stated maturity date.
  • 7The company has the option to redeem the Class D preferred stock on or after May 27, 2009.

Frequently Asked Questions

The primary purpose of this offering is to raise approximately $27.6 million in net proceeds, which will be used to reduce outstanding borrowings under Realty Income Corporation's $250 million credit facility and for general corporate purposes. This suggests a focus on strengthening the company's financial leverage and flexibility.

The Class D preferred stock offers a fixed dividend of 7.375% paid monthly. It has no stated maturity date, offering perpetual capital to the company. Importantly, Realty Income Corporation has the option to redeem these shares starting on May 27, 2009.

By using the net proceeds to repay outstanding borrowings under its credit facility, this offering is expected to reduce the company's overall debt burden. This deleveraging strategy can improve financial ratios and potentially lower interest expenses.

The offering is being underwritten by Credit Suisse First Boston LLC.