Business & Finance
Business and Finance
Business and Finance
Wed, June 15, 2011 Fitch Rates Realty Income's 5.875% Senior Unsecured Notes Due 2035 'BBB+'
NEW YORK--([ BUSINESS WIRE ])--Fitch rates the $150 million aggregate principal amount 5.875% coupon rate senior unsecured notes due June 2035 issued by Realty Income Corporation (NYSE: O) 'BBB+'. The notes were priced at 94.578% of par value to yield 6.318% to maturity, or 205 basis points over the benchmark treasury rate. The notes constitute an additional issuance of, and a single series with, the $100 million aggregate principal amount of 5.875% senior unsecured notes issued on March 11, 2005.
Realty Income intends to use all of the net proceeds from the offering of $140.1 million to fund a portion of the acquisition of 33 single-tenant properties for an aggregate purchase price of approximately $544 million. As of June 10, 2011, Realty Income acquired 20 of these properties for $278 million and planned to finance the remaining 13 properties totaling $266 million with the proceeds from the 5.875% notes offering, remaining proceeds from a March 2011 sale of common stock for $285.5 million, the assumption of mortgage debt, and credit facility borrowings.
Fitch currently rates Realty Income Corporation as follows:
--Issuer Default Rating 'BBB+';
--$425 million unsecured revolving credit facility 'BBB+';
--$1.6 billion senior unsecured notes 'BBB+';
--$337.8 million preferred stock at 'BBB-'.
The Rating Outlook is Stable.
For additional information, please refer to Fitch's full rating report, 'Realty Income Corporation,' dated Oct. 22, 2010 and available at '[ www.fitchratings.com ]'.
Realty Income Corporation is a real estate investment trust (REIT) based in Escondido, California. As of March 31, 2011, Realty Income owned a portfolio of 2,519 properties located in 49 states, with over 22.5 million square feet of leasable space leased to 125 different retail and other commercial enterprises doing business in 31 separate industries. Of the 2,519 properties in the portfolio at that date, 2,503 were single-tenant properties, of which 2,423 were leased with a weighted average remaining lease term of approximately 11.5 years. As of March 31, 2011, Realty Income had $4.5 billion in gross book assets and a total market capitalization of $6.4 billion.
Additional information is available at '[ www.fitchratings.com ]'.
Applicable Criteria and Related Research:
--'Recovery Rating and Notching Criteria for Equity REITs' (May 12, 2011);
--'Criteria for Rating U.S. Equity REITs and REOCs' (March 15, 2011);
--'Corporate Rating Methodology' (Aug. 16, 2010).
Applicable Criteria and Related Research:
Recovery Rating and Notching Criteria for Equity REITs
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=628490 ]
Criteria for Rating U.S. Equity REITs and REOCs
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=610687 ]
Corporate Rating Methodology
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=546646 ]
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