8-K: Highwoods Issues $350M Notes Due 2033 at 5.350%

Sentiment:

Debt Offering 14 November 2025 4:07 PM

📋All filings for Highwoods Properties, INC

Highwoods Realty Limited Partnership completed a public offering of $350 million in 5.350% notes maturing in 2033.

Capital raiseHighwoods Realty Limited Partnership completed a public offering of $350,000,000 aggregate principal amount of 5.350% Notes due January 15, 2033.The Notes were issued at 100% of their principal amount.The Issuer retains the option to increase the principal amount of the Notes by issuing additional notes on the same terms and conditions in the future.

Summary

Highwoods Realty Limited Partnership, the operating entity for Highwoods Properties, Inc., completed a public offering of $350,000,000 aggregate principal amount of 5.350% Notes due January 15, 2033.
The Notes will bear interest at an annual rate of 5.350%, accruing from November 14, 2025, and payable semi-annually in arrears on January 15 and July 15, commencing July 15, 2026.
The Notes are redeemable at the Issuer's option, in whole or in part, at any time. Before November 15, 2032 (the Par Call Date), the redemption price will be the greater of a make-whole amount (Treasury Rate plus 25 basis points) or 100% of the principal amount, plus accrued interest.
On or after the Par Call Date, the redemption price will be 100% of the principal amount plus accrued interest.
The offering was made pursuant to an automatic shelf registration statement on Form S-3 and related prospectus supplements.
Several key definitions and covenants within the indenture governing the Notes were amended, including those related to Total Unencumbered Assets, Indebtedness, Undepreciated Real Estate Assets, and the definition of an Event of Default.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive as the company successfully secured a significant amount of capital through a debt offering, which is a routine and necessary part of corporate finance for a REIT. The fixed interest rate provides certainty, and the redemption option offers flexibility. No immediate negative implications are apparent from the terms themselves.

Positives

Successfully completed a public offering, securing $350,000,000 in capital.
The fixed interest rate of 5.350% provides predictability for future interest expenses over the term of the notes.
The ability to redeem the notes at the Issuer's option provides financial flexibility for future capital management.

Negatives

Incurrence of $350,000,000 in new debt increases the company's leverage.
The 5.350% interest rate represents a fixed cost that must be serviced semi-annually until maturity or redemption.

Risks

Risk of an Event of Default under the indenture, which could lead to the acceleration of the principal amount of the Notes.
Changes in market interest rates could make the fixed 5.350% interest rate less favorable over time, impacting the cost of future financing or the attractiveness of the Notes.
The company's ability to maintain Total Unencumbered Assets at not less than 150% of outstanding unsecured debt is a key covenant, and failure to do so would constitute a default.

Future Outlook

The Issuer may, in the future and without the consent of existing Holders, increase the principal amount of the Notes by issuing additional notes on the same terms and conditions. The company's organization and current and proposed method of operation are expected to enable it to continue to qualify as a Real Estate Investment Trust (REIT) for its taxable year ending December 31, 2025, and thereafter.

Management Comments

Theodore J. Klinck, President and Chief Executive Officer of Highwoods Properties, Inc., and Jeffrey D. Miller, Executive Vice President, General Counsel and Secretary of Highwoods Properties, Inc., signed the Officers Certificate establishing the terms of the Notes, affirming the company's commitment to the offering's terms.

Industry Context

This debt offering is a standard capital markets activity for a publicly traded Real Estate Investment Trust (REIT) like Highwoods Properties. It allows the company to manage its capital structure, refinance existing debt, or fund new investments, aligning with typical financial strategies in the real estate sector to maintain liquidity and support growth.

Comparison to Industry Standards

The filing does not provide sufficient information to make specific comparisons to comparable companies, projects, or results within the industry. A comprehensive assessment would require analysis of prevailing market interest rates for similar credit ratings and maturities in the REIT sector at the time of issuance.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Covenant Amendment	Section 1012 of the Indenture was amended to require the Issuer to maintain Total Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of all outstanding Unsecured Debt.	2025-11-14	This amendment sets a specific financial ratio for asset coverage of unsecured debt, providing a clear benchmark for financial health and creditor protection.
Definition Amendment	The definition of 'Total Unencumbered Assets' (Section 101) was amended to exclude investments in unconsolidated joint ventures, limited partnerships, limited liability companies, and other unconsolidated entities, as well as operating lease right-of-use assets.	2025-11-14	This change narrows the scope of assets considered 'unencumbered,' potentially making the 150% coverage covenant more stringent or reflective of directly controlled, unencumbered assets.
Reporting Requirement Amendment	The second paragraph of Section 1014 of the Indenture was amended to require the Issuer to transmit annual and quarterly reports to Holders and file them with the Trustee within 15 days of each Required Filing Date, if not available on EDGAR.	2025-11-14	Enhances transparency and information flow to noteholders, ensuring they receive timely financial reports.
Event of Default Definition Amendment	Effective upon the time that all Securities issued under the Indenture prior to this Certificate are no longer Outstanding, Section 501(5) of the Indenture will be amended to define a default under recourse Indebtedness exceeding $25,000,000 as an Event of Default.	Upon cessation of prior outstanding securities	This change clarifies and potentially adjusts the threshold for what constitutes a material default under other recourse indebtedness, impacting the conditions under which noteholders can declare an Event of Default.
Definition Amendment	The definition of 'Indebtedness' (Section 101) was amended to explicitly exclude operating lease liabilities reflected on the consolidated balance sheet in accordance with GAAP.	2025-11-14	This aligns the definition of indebtedness with current accounting standards (e.g., ASC 842) by distinguishing between financing and operating lease liabilities, potentially reducing the reported 'Indebtedness' for covenant calculation purposes.
Definition Amendment	The definition of 'Undepreciated Real Estate Assets' (Section 101) was amended to include right-of-use assets associated with a financing lease and exclude those from an operating lease.	2025-11-14	This change clarifies which lease-related assets contribute to the 'Undepreciated Real Estate Assets' calculation, aligning it with the updated 'Indebtedness' definition and GAAP treatment of leases.

Stakeholder Impact

Shareholders: The issuance of debt increases leverage, which can impact the company's risk profile and potentially the cost of equity, though it does not directly dilute equity.
Creditors: Existing creditors will now share the company's assets and cash flows with the new noteholders. The amended covenants provide specific protections and reporting requirements for noteholders.
Management: The management team is responsible for ensuring compliance with the new debt covenants and managing the increased interest expense.

Next Steps

Semi-annual interest payments will commence on July 15, 2026, and continue until the Notes mature or are redeemed.
The company will continue to comply with the amended covenants and reporting requirements outlined in the Indenture.
The Issuer may consider issuing additional notes under the same terms in the future to raise further capital.

Key Dates

Date	Description
1996-12-01	Original date of the Base Indenture governing the Notes.
2023-02-07	Effective date of the automatic shelf registration statement on Form S-3.
2025-10-23	Date resolutions were adopted by the Board of Directors of Highwoods Properties, Inc. regarding the Notes.
2025-11-04	Date of the preliminary and final prospectus supplements and the Underwriting Agreement.
2025-11-14	Completion date of the public offering of the Notes; date interest begins to accrue; date of the Officers Certificate establishing the terms of the Notes.
2026-07-15	First interest payment date for the Notes.
2032-11-15	Par Call Date, two months prior to maturity, after which notes can be redeemed at 100% of principal.
2033-01-15	Maturity Date of the 5.350% Notes.

Keywords

Highwoods Properties, Highwoods Realty Limited Partnership, Debt Offering, Corporate Notes, Fixed Income, REIT, Real Estate, Capital Raise, 5.350% Notes, 2033 Maturity

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