BXP, Inc. (BXP), a real estate investment trust, on Wednesday announced that its operating partnership, Boston Properties Ltd. Partnership, plans to offer $600.0 million aggregate principal amount of exchangeable senior notes due 2030 in a private placement.
The unsecured notes will carry semiannual interest payments and mature on October 1, 2030, unless they are earlier exchanged, redeemed, or repurchased.
Boston Properties will also grant the initial purchasers a 13-day option to buy up to an additional $90.0 million of notes.
The notes may be redeemed, in part or whole, from October 6, 2028, if BXP's share price trades at least 130% above the exchange price for a set period.
Boston Properties may also redeem earlier if needed to preserve its REIT status.
The company said that the holders will be able to exchange the notes under certain conditions, with settlement in cash up to the principal amount, and in cash, BXP shares, or a mix, at Boston Properties's choice, for any excess.
Further in connection with the deal, BXP and Boston Properties expect to enter capped call transactions designed to limit potential dilution upon exchange of the notes or offset cash payments above principal.
The net proceeds are used to cover capped call costs and to help repay or redeem Boston Properties' $1.0 billion 3.650% senior notes maturing on February 1, 2026, with the balance to be funded by cash or its revolving credit facility.
The company said any interim proceeds may be used to reduce other debt or for short-term investments, and final terms, including the interest rate and initial exchange rate, will be set at pricing.
In the pre-market trading, BXP is 0.75% lesser at $75.64 on the New York Stock Exchange.
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