8-KOther EventsExhibits & Filings

REALTY INCOME CORP 8-K Report, Corporate Update (Dec 5, 2006)

Filed December 5, 2006For Securities:O

Summary

Realty Income Corporation (O) filed an 8-K on December 5, 2006, to report on a significant capital raise. The company entered into a purchase agreement on November 30, 2006, to issue and sell 8.8 million shares of its 6.75% Monthly Income Class E Cumulative Redeemable Preferred Stock. This offering, with a public price of $25.00 per share, is expected to close on December 7, 2006, generating net proceeds of approximately $214 million after deducting underwriting discounts and expenses. The primary intended use of these proceeds is to repay outstanding borrowings under the company's $300 million credit facility, which will strengthen its balance sheet and improve financial flexibility. The remaining funds will be allocated to general corporate purposes. The Class E preferred stock has no stated maturity and can be redeemed at the company's option beginning December 7, 2011.

Key Highlights

  • 1Realty Income Corp (O) announced the issuance and sale of 8.8 million shares of 6.75% Monthly Income Class E Cumulative Redeemable Preferred Stock.
  • 2The public offering price for the preferred stock is $25.00 per share.
  • 3The offering is expected to generate approximately $214 million in net proceeds.
  • 4Proceeds are primarily intended to repay outstanding borrowings under the company's $300 million credit facility.
  • 5The Class E preferred stock has no stated maturity date.
  • 6The company has the option to redeem the preferred stock on or after December 7, 2011.
  • 7The purchase agreement was entered into on November 30, 2006, with closing anticipated on December 7, 2006.

Frequently Asked Questions

This 8-K filing reports on Realty Income Corporation's agreement to issue and sell a new series of preferred stock (6.75% Monthly Income Class E Cumulative Redeemable Preferred Stock) and the expected use of the proceeds.

The company expects to raise approximately $214 million in net proceeds from the sale of 8.8 million shares of its Class E preferred stock. These funds are primarily designated to repay outstanding debt under its $300 million credit facility and for other general corporate purposes.

The 6.75% Class E preferred stock has a public offering price of $25.00 per share. It does not have a stated maturity date, but Realty Income Corporation has the option to redeem it at $25.00 per share starting on December 7, 2011.

The underwriters for this offering include Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wachovia Capital Markets, LLC, acting as representatives for the several underwriters.