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Essex Property Trust (NYSE:ESS) announced that its operating partnership, Essex Portfolio, L.P., has priced a $400 million public offering of senior notes due 2035. The notes were priced at 99.604% of par value with a 5.425% yield to maturity and carry a 5.375% interest rate, payable semiannually on April 1 and October 1, starting October 1, 2025.
The proceeds will primarily be used to repay upcoming debt maturities, including funding part of the repayment of the issuer’s $500.0 million 3.500% senior notes due April 2025. Additional uses include general corporate purposes, working capital, and potential acquisition funding. Initially, the proceeds may be used to repay outstanding borrowings under unsecured credit facilities or invested in short-term securities.
The offering, expected to close on February 18, 2025, was managed by several financial institutions, with J.P. Morgan Securities, U.S. Bancorp Investments, and Wells Fargo Securities serving as joint book-running managers.
Essex Property Trust (NYSE:ESS) ha annunciato che la sua partnership operativa, Essex Portfolio, L.P., ha fissato il prezzo di un offerta pubblica di $400 milioni di obbligazioni senior con scadenza nel 2035. Le obbligazioni sono state fissate al 99,604% del valore nominale con un rendimento alla scadenza del 5,425% e un tasso di interesse del 5,375%, pagabile semestralmente il 1 aprile e il 1 ottobre, a partire dal 1 ottobre 2025.
Il ricavato sarà principalmente utilizzato per rimborsare le scadenze di debito imminenti, incluso il finanziamento parziale del rimborso delle obbligazioni senior da $500 milioni al 3,500% in scadenza ad aprile 2025. Ulteriori utilizzi includono scopi aziendali generali, capitale circolante e potenziale finanziamento per acquisizioni. Inizialmente, il ricavato potrebbe essere utilizzato per rimborsare prestiti non garantiti o investito in titoli a breve termine.
L’offerta, che dovrebbe chiudersi il 18 febbraio 2025, è stata gestita da diverse istituzioni finanziarie, con J.P. Morgan Securities, U.S. Bancorp Investments e Wells Fargo Securities che fungono da co-manager principali.
Essex Property Trust (NYSE:ESS) anunció que su asociación operativa, Essex Portfolio, L.P., ha fijado el precio de una oferta pública de $400 millones de notas senior con vencimiento en 2035. Las notas se fijaron al 99,604% del valor nominal con un rendimiento al vencimiento del 5,425% y una tasa de interés del 5,375%, pagadera semestralmente el 1 de abril y el 1 de octubre, comenzando el 1 de octubre de 2025.
Los ingresos se utilizarán principalmente para pagar vencimientos de deuda próximos, incluyendo el financiamiento de parte del reembolso de las notas senior de $500 millones al 3,500% que vencen en abril de 2025. Otros usos incluyen fines corporativos generales, capital de trabajo y financiamiento potencial para adquisiciones. Inicialmente, los ingresos podrían ser usados para pagar préstamos pendientes bajo líneas de crédito no garantizadas o invertidos en valores a corto plazo.
Se espera que la oferta cierre el 18 de febrero de 2025 y fue gestionada por varias instituciones financieras, con J.P. Morgan Securities, U.S. Bancorp Investments y Wells Fargo Securities como co-gestores principales.
엑섹스 부동산 신탁 (NYSE:ESS)은 운영 파트너십인 엑섹스 포트폴리오, L.P.가 2035년 만기인 4억 달러 규모의 공모 노트 발행 가격을 책정했다고 발표했습니다. 노트는 액면가의 99.604%로 책정되었으며 만기 수익률은 5.425%이고 이자율은 5.375%로, 2025년 10월 1일부터 매년 4월 1일과 10월 1일에 반기별로 지급됩니다.
수익금은 주로 다가오는 부채 만기 상환에 사용되며, 2025년 4월 만기인 발행자의 5억 달러 규모의 3.500% 양도성 채권의 상환 일부 자금으로 사용됩니다. 추가적인 용도로는 일반 기업 목적, 운영 자본, 그리고 잠재적 인수 자금이 포함됩니다. 초기에는 수익금이 무담보 신용 시설에서의 미지급 대출 상환에 사용되거나 단기 증권에 투자될 수 있습니다.
이번 공모는 2025년 2월 18일에 마감될 예정이며, J.P. 모건 증권, U.S. 반코프 투자 및 웰스 파고 증권이 공동 주관 관리자로서 여러 금융 기관에 의해 관리됩니다.
Essex Property Trust (NYSE:ESS) a annoncé que son partenariat opérationnel, Essex Portfolio, L.P., a fixé le prix d’une offre publique de 400 millions de dollars d’obligations senior arrivant à échéance en 2035. Les obligations ont été fixées à 99.604 % de la valeur nominale avec un rendement à l’échéance de 5.425 % et un taux d’intérêt de 5.375 %, payable semestriellement le 1er avril et le 1er octobre, à partir du 1er octobre 2025.
Les produits seront principalement utilisés pour rembourser des échéances de dette à venir, y compris le financement d’une partie du remboursement des obligations senior de 500 millions de dollars au taux de 3.500 % arrivant à échéance en avril 2025. D’autres utilisations incluent des objectifs d’entreprise généraux, du fonds de roulement et un financement potentiel pour des acquisitions. Dans un premier temps, les produits pourraient être utilisés pour rembourser des emprunts en cours sous des lignes de crédit non garanties ou investis dans des titres à court terme.
On s’attend à ce que l’offre se clôture le 18 février 2025, gérée par plusieurs institutions financières, avec J.P. Morgan Securities, U.S. Bancorp Investments et Wells Fargo Securities en tant que co-managers principaux.
Essex Property Trust (NYSE:ESS) gab bekannt, dass ihre Betriebspartnerschaft, Essex Portfolio, L.P., eine öffentliche Anleihe von 400 Millionen Dollar mit Fälligkeit 2035 festgelegt hat. Die Anleihen wurden zu 99,604% des Nennwerts mit einer Rendite bis zur Fälligkeit von 5,425% und einem Zinssatz von 5,375% bepreist, zahlbar halbjährlich am 1. April und am 1. Oktober, beginnend am 1. Oktober 2025.
Der Erlös wird hauptsächlich verwendet, um bevorstehende Schuldenfälligkeiten zurückzuzahlen, einschließlich der Teilfinanzierung der Rückzahlung der 500 Millionen Dollar 3,500%-Anleihen des Emittenten, die im April 2025 fällig sind. Weitere Verwendungszwecke sind allgemeine Unternehmenszwecke, Betriebskapital und mögliche Akquisitionsfinanzierung. Zu Beginn kann der Erlös verwendet werden, um ausstehende Darlehen unter unbesicherten Krediten zurückzuzahlen oder in kurzfristige Wertpapiere investiert zu werden.
Die Angebotsfrist, die am 18. Februar 2025 schließen soll, wurde von mehreren Finanzinstitutionen verwaltet, wobei J.P. Morgan Securities, U.S. Bancorp Investments und Wells Fargo Securities als Hauptverwalter fungieren.
Positive
- Successful pricing of $400 million senior notes offering
- Refinancing of higher-cost debt (3.500% notes being replaced with 5.375% notes)
- Strong institutional backing with multiple tier-1 financial institutions as managers
Negative
- Higher interest rate on new notes (5.375%) compared to maturing notes (3.500%)
- Net increase in interest expenses will impact future cash flows
Insights
This $400M senior notes offering by Essex Property Trust represents a strategic debt refinancing move with several key implications for investors:
The new notes, priced at 5.375% yield versus the maturing 3.500% notes, reflect a 1.875% increase in borrowing costs. While this higher rate will impact interest expenses by approximately $7.5M annually, the proactive refinancing approach demonstrates prudent liability management by addressing the $500M April 2025 maturity well in advance.
Several positive aspects stand out:
- The 10-year tenor extends debt maturity profile to 2035, reducing near-term refinancing risk
- Strong underwriter participation from major banks indicates robust market confidence
- Flexibility in use of proceeds allows for potential opportunistic acquisitions
The timing is particularly strategic given the uncertain interest rate environment. By securing long-term financing now, Essex reduces exposure to potential rate volatility while maintaining financial flexibility through its credit facilities. This move aligns with typical REIT strategies of maintaining a balanced debt maturity ladder and diverse funding sources.
For the company’s West Coast multifamily portfolio of 256 communities, this financing provides stable long-term capital while preserving operational flexibility. The slight premium to par pricing at 99.604% suggests strong institutional demand, reflecting confidence in Essex’s market position and credit quality.
SAN MATEO, Calif.–(BUSINESS WIRE)– Essex Property Trust, Inc. (NYSE:ESS) (“Essex”) announced today that its operating partnership, Essex Portfolio, L.P. (the “Issuer”), priced an underwritten public offering of $400 million aggregate principal amount of 5.375% senior notes due 2035 (the “Notes”). The Notes were priced at 99.604% of par value with a yield to maturity of 5.425%. Interest is payable semiannually at an interest rate per annum of 5.375% on April 1 and October 1 of each year with the first interest payment due October 1, 2025. The Notes mature on April 1, 2035. The Notes will be the senior unsecured obligations of the Issuer and will be fully and unconditionally guaranteed by Essex. The Notes offering is expected to close on February 18, 2025, subject to the satisfaction of certain closing conditions.
The Issuer intends to use the net proceeds of this offering to repay upcoming debt maturities, including to fund a portion of the repayment of the Issuer’s $500.0 million aggregate principal amount outstanding of 3.500% senior notes due April 2025, and for other general corporate and working capital purposes, which may include the funding of potential acquisition opportunities. Pending application of the net proceeds from the offering for the foregoing purposes, such proceeds initially may be used to repay borrowings outstanding under the Issuer’s unsecured credit facilities and/or invested in short-term securities.
J.P. Morgan Securities LLC, U.S. Bancorp Investments, Inc., Wells Fargo Securities, LLC, BMO Capital Markets Corp., PNC Capital Markets LLC and Truist Securities, Inc. served as joint book-running managers, BofA Securities, Inc., Scotia Capital (USA) Inc. and TD Securities (USA) LLC served as senior co-managers and Mizuho Securities USA LLC, Regions Securities LLC and Samuel A. Ramirez & Company, Inc. served as co-managers for the offering.
The Issuer and Essex have jointly filed a registration statement (including a preliminary prospectus supplement and a prospectus) with the U.S. Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. You may get these documents for free by searching the SEC online database on the SEC website at http://www.sec.gov. Alternatively, the Issuer, Essex, any underwriter or any dealer participating in the offering will arrange to send you the prospectus supplement and prospectus if you request it from (i) J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com, (ii) U.S. Bancorp Investments, Inc. toll free at 1-877-558-2607 or (iii) Wells Fargo Securities, LLC toll free at 1-800-645-3751.
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 sale of these securities in any jurisdiction in which, or to any person to whom, such offer, solicitation or sale would be unlawful.
About Essex Property Trust, Inc.
Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (“REIT”) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 256 apartment communities comprising over 62,000 apartment homes with an additional property in active development. Additional information about the Company can be found on the Company’s website at www.essex.com.
Safe Harbor Statement
This press release includes “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 statements which are not historical facts, including statements regarding our expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as “expects,” “assumes,” “anticipates,” “may,” “will,” “intends,” “plans,” “projects,” “believes,” “seeks,” “future,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements related to the Notes offering, including the terms, timing and completion of the offering and the expected use of the net proceeds therefrom. We cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect our current expectations of the approximate outcomes of the matters discussed. Factors that might cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, those associated with market risks and uncertainties and the satisfaction of customary closing conditions for an offering of the Notes, as well as the risks referenced in our annual report on Form 10-K for the year ended December 31, 2023, our quarterly reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, and any subsequent current reports on Form 8-K filed (and not furnished) by us with the SEC, and the prospectus supplement and related prospectus for this offering, as well as those risk factors and special considerations set forth in our other filings with the SEC that are incorporated by reference in such prospectus supplement and accompanying prospectus which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements are made as of the date hereof, we assume no obligation to update or supplement this information for any reason, and therefore, they may not represent our estimates and assumptions after the date of this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250206072367/en/
Loren Rainey
Director, Investor Relations
(650) 655-7800
Source: Essex Property Trust, Inc.
FAQ
What are the terms of Essex Property Trust’s (ESS) new $400M senior notes offering?
The notes are priced at 99.604% of par value with a 5.375% interest rate, payable semiannually on April 1 and October 1, starting October 1, 2025. They have a yield to maturity of 5.425% and will mature on April 1, 2035.
How will Essex Property Trust (ESS) use the proceeds from the $400M notes offering?
The proceeds will primarily be used to repay upcoming debt maturities, including funding part of the $500.0 million 3.500% senior notes due April 2025, and for general corporate purposes, working capital, and potential acquisitions.
When is the closing date for Essex Property Trust’s (ESS) $400M notes offering?
The notes offering is expected to close on February 18, 2025, subject to satisfaction of closing conditions.
What is the interest rate difference between ESS’s new notes and the maturing notes?
The new notes carry a 5.375% interest rate, while the maturing notes had a 3.500% interest rate, representing an increase of 1.875 percentage points.
