8-KOther EventsExhibits & Filings

REALTY INCOME CORP 8-K Report, Corporate Update (Nov 6, 2018)

Filed November 6, 2018For Securities:O

Summary

Realty Income Corporation (O) has filed a Current Report on Form 8-K to announce the immediate effectiveness of a shelf registration statement and the filing of several prospectus supplements. This filing, dated November 5, 2018, signals the company's intent to offer and sell various tranches of its common stock, including shares related to its Dividend Reinvestment and Stock Purchase Plan, shares potentially issued from the redemption of units in its operating partnership, and up to approximately 28.96 million shares through a new "at-the-market" (ATM) equity program. The most significant development is the establishment of this new ATM program. Realty Income has entered into a Sales Agreement with a syndicate of agents, allowing for the continuous offering and sale of its common stock. This program also incorporates forward sale agreements, where forward purchasers may borrow and sell shares to hedge their positions, with Realty Income potentially settling these agreements later through cash or stock. The company intends to use proceeds from these offerings for general corporate purposes, including debt repayment, property acquisitions, and portfolio enhancements. This proactive capital-raising initiative provides flexibility to fund growth and manage its balance sheet.

Key Highlights

  • 1Realty Income Corp. filed an 8-K on November 5, 2018, announcing the effectiveness of a shelf registration statement.
  • 2Three prospectus supplements were filed, covering dividend reinvestment, redemption of operating partnership units, and an at-the-market (ATM) equity offering.
  • 3A new "at-the-market" (ATM) equity program has been established, allowing for the sale of up to approximately 28.96 million shares of common stock.
  • 4The ATM program includes provisions for forward sale agreements, where forward purchasers may sell borrowed shares, with potential future settlement by Realty Income.
  • 5Proceeds from the ATM program are intended for general corporate purposes, including debt repayment, property acquisitions, and portfolio improvements.
  • 6The existing ATM program from October 27, 2017, has been terminated.
  • 7Several leading financial institutions have been appointed as agents for the ATM program.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce the immediate effectiveness of Realty Income's shelf registration statement and the filing of related prospectus supplements. This enables the company to offer and sell its common stock through various channels, most notably a new "at-the-market" (ATM) equity program.

The ATM program allows Realty Income to sell shares of its common stock directly into the market over time, typically at prevailing market prices. The company can sell up to approximately 28.96 million shares of its common stock through this program, managed by a syndicate of agents.

Forward sale agreements are part of the ATM program. Under these agreements, forward purchasers may borrow shares and sell them into the market. Realty Income then has the option to settle these agreements at a later date, either by delivering cash or shares. This allows the company to potentially receive proceeds at a future date and manage its capital efficiently, though it also introduces settlement risks.

The company intends to use the net cash proceeds from any shares issued and sold under the ATM program for general corporate purposes. This includes repaying or repurchasing indebtedness (such as borrowings under its revolving credit facility), funding the development and acquisition of additional properties, and expanding or improving existing properties in its portfolio.