How much capital is Realty Income raising and what are the note terms?

Realty Income priced $875.0 million of 3.750% convertible senior unsecured notes due August 15, 2031. Interest is paid semi-annually beginning February 15, 2027, and the notes are sold privately under Rule 144A, with settlement scheduled for August 14, 2026.

At what price would the notes convert into common stock?

The initial conversion price is approximately $72.72 per share, equal to 13.7512 shares per $1,000 principal. This is about a 17.5% premium over the $61.89 closing price on August 11, 2026. Conversion is restricted before May 15, 2031 except upon certain events.

How will the company reduce dilution from the convertible notes?

Realty Income entered into capped call transactions costing about $29.1 million, with a cap price of about $83.55 per share. They are designed to offset dilution and potential cash payments above principal up to that cap, though dilution still applies above the cap.

What will the company do with the proceeds?

About $188.7 million will repurchase roughly 3.0 million common shares concurrently with pricing, and about $29.1 million funds the capped calls. The remainder is for general corporate purposes, including repaying indebtedness, hedging, and property development and acquisitions.

Can the company force conversion or redeem the notes early?

The company cannot redeem the notes before August 20, 2029, except in cleanup or REIT-preservation redemptions. After that date, it may redeem for cash if the stock trades above 130% of the conversion price for a specified period. Noteholders may require repurchase at par plus accrued interest upon a fundamental change.

O 8-K SEC Disclosure — Aug 12, 2026

01—Abstract

Summary

Summary of the 8-K filed August 12, 2026. Cited figures are marked; the original filing is the authoritative source.

Realty Income Corporation (NYSE: O) priced an upsized private offering of $875.0 million^a aggregate principal amount of 3.750% convertible senior notes due August 15, 2031, up from the previously announced $750.0 million.

The notes are senior unsecured obligations, are expected to settle on August 14, 2026, and give the initial purchasers an option for up to an additional $125.0 million^b. Estimated net proceeds are about $859.0 million, or roughly $981.9 million if the option is fully exercised. The initial conversion price is about $72.72 per share, a 17.5% premium to the $61.89 closing price on August 11, 2026.

Conversion is restricted until May 15, 2031, except upon specified events, and the company may settle conversions in cash, shares, or a combination. The company is using about $188.7 million^c of proceeds to repurchase roughly 3.0 million common shares concurrently with pricing, through an initial purchaser or its affiliate acting as agent. It is also spending about $29.1 million on capped call transactions, which are designed to reduce dilution from conversions up to a cap price of about $83.55, a 35.0% premium to the reference price.

The remaining proceeds are earmarked for general corporate purposes, including repaying or repurchasing indebtedness, hedging, and property development and acquisitions. Share repurchases and hedging activity by the option counterparties could affect the stock and note prices, and the company has noted the repurchases may have influenced the initial conversion price. For investors, the transaction is a sizable, upsized financing that adds convertible debt at a 3.75%^d coupon while partly offsetting dilution through capped calls and buybacks.

The filing does not disclose the company's financial results or the reasons for the upsizing. Note that the 8-K describes pricing terms only, and the offering was not yet confirmed as closed at the time of filing.

02—Key points

Key Highlights

Upsized offering: $875.0 million of 3.750% convertible senior notes due 2031, increased from $750.0 million, with an additional $125.0 million option for the initial purchasers.
Conversion terms: initial conversion price of about $72.72 per share, a 17.5% premium to the $61.89 reference price, with a conversion rate of 13.7512 shares per $1,000 principal.
Net proceeds: approximately $859.0 million, or about $981.9 million if the option is fully exercised, after discounts and expenses.
Concurrent buyback: about $188.7 million to repurchase roughly 3.0 million common shares, which may have affected the initial conversion price.
Capped calls: about $29.1 million cost, with a cap price of about $83.55 (35.0% premium) to offset dilution from conversions up to that level.
Redemption: no company redemption before August 20, 2029, and then only if the stock exceeds 130% of the conversion price; cleanup and REIT-preservation redemptions are also permitted.
Use of proceeds: remainder for general corporate purposes, including debt repayment, hedging, and property development and acquisitions.

03—Questions

Frequently Asked Questions

How much capital is Realty Income raising and what are the note terms?
Realty Income priced $875.0 million of 3.750% convertible senior unsecured notes due August 15, 2031. Interest is paid semi-annually beginning February 15, 2027, and the notes are sold privately under Rule 144A, with settlement scheduled for August 14, 2026.
At what price would the notes convert into common stock?
The initial conversion price is approximately $72.72 per share, equal to 13.7512 shares per $1,000 principal. This is about a 17.5% premium over the $61.89 closing price on August 11, 2026. Conversion is restricted before May 15, 2031 except upon certain events.
How will the company reduce dilution from the convertible notes?
Realty Income entered into capped call transactions costing about $29.1 million, with a cap price of about $83.55 per share. They are designed to offset dilution and potential cash payments above principal up to that cap, though dilution still applies above the cap.
What will the company do with the proceeds?
About $188.7 million will repurchase roughly 3.0 million common shares concurrently with pricing, and about $29.1 million funds the capped calls. The remainder is for general corporate purposes, including repaying indebtedness, hedging, and property development and acquisitions.
Can the company force conversion or redeem the notes early?
The company cannot redeem the notes before August 20, 2029, except in cleanup or REIT-preservation redemptions. After that date, it may redeem for cash if the stock trades above 130% of the conversion price for a specified period. Noteholders may require repurchase at par plus accrued interest upon a fundamental change.

04—Continue

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