Kilroy Realty, L.P. Prices $400.0 Million of 4.750% Senior Notes Due 2028
15 November 2018 - 8:07AM
Business Wire
Kilroy Realty Corporation (NYSE:KRC) (the “Company”)
today announced that its operating partnership, Kilroy Realty,
L.P., has priced an underwritten public offering of $400.0 million
aggregate principal amount of 4.750% senior notes due 2028 (the
“Notes”). The Notes will pay interest semi-annually at a rate of
4.750% per annum on June 15 and December 15 each year, commencing
on June 15, 2019, and mature on December 15, 2028. The Notes were
priced at 99.634% of the principal amount with a yield to maturity
of 4.796%. The offering is expected to close on November 29, 2018,
subject to the satisfaction of customary closing conditions.
J.P. Morgan, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, BBVA, Jefferies and Wells Fargo Securities acted as
joint book-running managers, Barclays, Citigroup, Goldman Sachs
& Co. LLC, KeyBanc Capital Markets, MUFG, Scotiabank and US
Bancorp acted as senior co-managers and BNP PARIBAS, Comerica
Securities, RBC Capital Markets and SMBC Nikko acted as co-managers
of the offering.
Net proceeds from the offering will be approximately $395.2
million, after deducting the underwriting discount and the
Company’s estimated expenses. The Company intends to allocate an
amount equal to the net proceeds from the offering to one or more
Eligible Green Projects (as defined), which may include the
development or redevelopment of such projects.
Pending the allocation of an amount equal to the net proceeds
from the offering to Eligible Green Projects, the Company intends
to use the net proceeds to redeem or repay indebtedness and may
also hold net proceeds in cash and cash equivalents. Such
indebtedness to be redeemed or repaid will include all $250.0
million aggregate principal amount (plus the make-whole premium and
accrued and unpaid interest) of the operating partnership’s 6.625%
Senior Notes due 2020 (the “2020 Notes”) and may include borrowings
under the operating partnership’s revolving credit facility and
term loan facility.
The Notes are being offered pursuant to an effective shelf
registration statement filed by Kilroy Realty Corporation and
Kilroy Realty, L.P. with the Securities and Exchange Commission
(“SEC”). The offering will be made only by means of the prospectus
supplement and accompanying prospectus. The preliminary prospectus
supplement and accompanying prospectus related to the offering have
been filed with the SEC and are available on the SEC’s website at
http://www.sec.gov. A copy of the final prospectus supplement and
accompanying prospectus related to the offering may be obtained,
when available, by calling J.P. Morgan Securities LLC collect at
(212) 834-4533; or by calling Merrill Lynch, Pierce, Fenner &
Smith Incorporated at 1-800-294-1322.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor will there be
any offer or sale of these securities in any jurisdiction in which,
or to any person to whom, such offer, solicitation or sale would be
unlawful. This press release shall not constitute a notice of
redemption under the optional redemption provisions of the
indenture governing the 2020 Notes.
About Kilroy Realty Corporation. Kilroy Realty
Corporation, a member of the S&P MidCap 400 Index, is a real
estate investment trust active in major West Coast markets. For
over 70 years, Kilroy Realty Corporation has owned, developed,
acquired and managed real estate assets primarily in the coastal
regions of Greater Los Angeles, Orange County, San Diego, the San
Francisco Bay Area and Greater Seattle. At September 30, 2018,
Kilroy Realty Corporation’s stabilized portfolio totaled
approximately 13.9 million square feet of office properties
and 200 residential units.
Forward-Looking Statements. This press release contains
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking
statements are based on the Company’s current expectations, beliefs
and assumptions, and are not guarantees of future performance.
Forward-looking statements are inherently subject to uncertainties,
risks, changes in circumstances, trends and factors that are
difficult to predict, many of which are outside of the Company’s
control. Accordingly, actual performance, results and events may
vary materially from those indicated or implied in the
forward-looking statements, and you should not rely on the
forward-looking statements as predictions of future performance,
results or events. Numerous factors could cause actual future
performance, results and events to differ materially from those
indicated in the forward-looking statements, including, among
others: global market and general economic conditions and their
effect on the Company’s liquidity and financial conditions and
those of its tenants; adverse economic or real estate conditions
generally, and specifically, in the States of California and
Washington; risks associated with the Company’s investment in real
estate assets, which are illiquid, and with trends in the real
estate industry; defaults on or non-renewal of leases by tenants;
any significant downturn in tenants’ businesses; the Company’s
ability to re-lease property at or above current market rates;
costs to comply with government regulations, including
environmental remediation; the availability of cash for
distribution and debt service and exposure to risk of default under
debt obligations; increases in interest rates and the Company’s
ability to manage interest rate exposure; the availability of
financing on attractive terms or at all, which may adversely impact
the Company’s future interest expense and its ability to pursue
development, redevelopment and acquisition opportunities and
refinance existing debt; a decline in real estate asset valuations,
which may limit the Company’s ability to dispose of assets at
attractive prices or obtain or maintain debt financing, and which
may result in write-offs or impairment charges; significant
competition, which may decrease the occupancy and rental rates of
properties; potential losses that may not be covered by insurance;
the ability to successfully complete acquisitions and dispositions
on announced terms; the ability to successfully operate acquired,
developed and redeveloped properties; the ability to successfully
complete development and redevelopment projects on schedule and
within budgeted amounts; delays or refusals in obtaining all
necessary zoning, land use and other required entitlements,
governmental permits and authorizations for the Company’s
development and redevelopment properties; increases in anticipated
capital expenditures, tenant improvement and/or leasing costs;
defaults on leases for land on which some of the Company’s
properties are located; adverse changes to, or enactment or
implementations of, tax laws or other applicable laws, regulations
or legislation, as well as business and consumer reactions to such
changes; risks associated with joint venture investments, including
the Company’s lack of sole decision-making authority, the Company’s
reliance on co-venturers’ financial condition and disputes between
the Company and its co-venturers; environmental uncertainties and
risks related to natural disasters; and the Company’s ability to
maintain its status as a REIT. These factors are not exhaustive and
additional factors could adversely affect the Company’s business
and financial performance. For a discussion of additional factors
that could materially adversely affect the Company’s and the
operating partnership’s business and financial performance, see the
factors included under the caption “Risk Factors” in the Company’s
and the operating partnership’s annual report on Form 10-K for the
year ended December 31, 2017 and in the prospectus supplement and
related prospectus for the offering, as well as the Company’s and
the operating partnership’s other filings with the Securities and
Exchange Commission that are incorporated by reference in such
prospectus supplement and accompanying prospectus. All
forward-looking statements are based on currently available
information, and speak only as of the date on which they are made.
The Company assumes no obligation to update any forward-looking
statement made in this press release that becomes untrue because of
subsequent events, new information or otherwise, except to the
extent the Company is required to do so in connection with its
ongoing requirements under federal securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20181114005899/en/
Tyler H. RoseExecutive Vice Presidentand Chief Financial
Officer(310) 481-8484orMichelle NgoSenior Vice Presidentand
Treasurer(310) 481-8581
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