Healthcare Realty Seeks $500M Exchangeable Notes Due 2032 with $75M Upsize Option
Healthcare Realty Holdings L.P. plans to issue $500 million of exchangeable senior notes due 2032, guaranteed by Healthcare Realty, with a $75 million upsizing option and semiannual interest. Proceeds will fund capped call hedges, repurchase $75 million of class A shares and retire 3.500% senior notes due 2026.
1. Exchangeable Senior Notes Offering
Healthcare Realty Holdings L.P. intends to offer $500 million aggregate principal amount of exchangeable senior notes due January 15, 2032, with an option for initial purchasers to purchase up to an additional $75 million. Healthcare Realty will fully and unconditionally guarantee the senior, unsecured notes, which will accrue interest payable semi-annually.
2. Use of Proceeds
A portion of net proceeds will fund capped call transactions to hedge potential dilution, up to $75 million will be used to repurchase class A common shares in privately negotiated transactions, and the remainder, alongside revolving credit borrowings, will repay outstanding 3.500% senior notes maturing in 2026.
3. Exchange, Redemption and Hedging Provisions
Noteholders may exchange their notes for cash or class A shares under specified conditions, while Healthcare Realty L.P. may redeem notes for cash on or after January 22, 2030 if the stock trades above 130% of the exchange price. Capped call transactions will reduce potential dilution or offset cash payments on exchanges, though dilution may occur if the stock price exceeds the cap price.