Summary
Welltower Inc. (WELL) has announced the issuance of $1.035 billion in 2.750% Exchangeable Senior Notes due 2028 through its operating company, Welltower OP LLC. These notes are senior unsecured obligations, fully guaranteed by the parent company, and are exchangeable under certain conditions or at the holder's option after November 15, 2027. The company intends to use the net proceeds for general corporate purposes, including potential debt repayment and investments in healthcare, wellness, and seniors housing properties. The offering was made to accredited investors and qualified institutional buyers, and a registration rights agreement is in place to facilitate the resale of common stock issuable upon exchange of the notes.
Key Highlights
- 1Issuance of $1,035,000,000 aggregate principal amount of 2.750% Exchangeable Senior Notes due 2028.
- 2Notes are senior unsecured obligations of Welltower OP LLC, guaranteed by Welltower Inc.
- 3Interest rate of 2.750% per annum, payable semiannually.
- 4Maturity date is May 15, 2028, with exchange options for holders starting November 15, 2027.
- 5Initial exchange rate is 10.4808 shares of Common Stock per $1,000 principal amount, implying an exchange price of approximately $95.41 per share.
- 6Proceeds to be used for general corporate purposes, potentially including debt repayment and property investments.
- 7Registration rights agreement ensures that shares issuable upon exchange can be registered for resale.
Frequently Asked Questions
The primary purpose of this note offering is to raise capital for general corporate purposes. This may include repaying existing debt, such as the 4.500% Notes due January 15, 2024, and the 3.625% Notes due March 15, 2024, as well as funding investments in health care, wellness, and seniors housing properties.
Holders can exchange the notes under specific circumstances before November 15, 2027. After November 15, 2027, and up to two business days before the maturity date of May 15, 2028, holders can exchange the notes at their option at any time.
The initial exchange rate implies an exchange price of approximately $95.41 per share of Welltower's Common Stock. Based on the closing price of $76.33 per share on May 8, 2023, this represents an approximate exchange premium of 25%.
Welltower has the option to redeem the notes on or after May 20, 2026, if the common stock price has been at least 130% of the then-current exchange price for at least 20 trading days within a 30-day period. This provides Welltower with an option to effectively force an exchange or redemption under certain appreciation scenarios.