LINE
Lineage, INC
NASDAQ
8-K: Lineage OP, LP Issues $500 Million Senior Notes Due 2030 to Refinance Debt and Bolster Working Capital
Sentiment:
Debt Offering Announcement
17 June 2025 4:19 PM
Lineage OP, LP, the operating partnership of Lineage, Inc., has successfully issued $500 million in 5.250% Senior Notes due 2030, with proceeds intended for revolving credit facility repayment and general corporate purposes.
Capital raise
Lineage OP, LP issued and sold $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
The net proceeds from the offering were approximately $489 million.
Summary
- Lineage OP, LP, the operating partnership of Lineage, Inc., issued and sold $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
- The notes are senior unsecured obligations of the operating partnership and are fully and unconditionally guaranteed by Lineage, Inc., Lineage Logistics Holdings, LLC, and other specified subsidiaries.
- Interest on the notes will be paid semi-annually on January 15 and July 15 of each year, commencing January 15, 2026, until the maturity date of July 15, 2030.
- The operating partnership can redeem the notes prior to June 15, 2030, at a redemption price based on the greater of a discounted present value (Treasury Rate + 25 basis points) or 100% of principal, plus accrued interest.
- On or after June 15, 2030, the notes can be redeemed at 100% of the principal amount plus accrued interest.
- Net proceeds from the offering were approximately $489 million, after deducting initial purchasers discount and estimated offering expenses.
- The proceeds will be used to repay amounts outstanding under the company's revolving credit facility and for other general corporate and working capital purposes.
- The notes were sold only to qualified institutional buyers (Rule 144A) or non-U.S. persons (Regulation S) and are not registered under the Securities Act of 1933.
- A Registration Rights Agreement obligates the company to file a registration statement for an exchange offer of these notes for registered notes with substantially identical terms, to be completed by June 17, 2026.
- Failure to meet registration obligations will result in an increase in the interest rate on the notes by 0.250% per annum for the first 90-day period, and an additional 0.250% per annum for each subsequent 90-day period, up to a maximum increase of 0.500% per annum.
- The Indenture contains restrictive covenants, including requirements to maintain a certain percentage of total unencumbered assets (not less than 150% of outstanding Unsecured Debt) and limits on incurring indebtedness (total debt not greater than 60% of Total Assets, secured debt not greater than 40% of Total Assets, and EBITDA to Interest Expense ratio not less than 1.5:1).
Sentiment
Score: 7
Explanation: The sentiment is moderately positive. The successful issuance of a significant amount of senior notes indicates strong market access and investor confidence. The use of proceeds for debt repayment and general corporate purposes is a prudent financial move. While restrictive covenants and potential interest rate increases for registration defaults are noted, they are standard provisions in such agreements and the company has a clear path to avoid penalties.
Positives
- Successful issuance of $500 million in senior notes provides capital for debt repayment and general corporate purposes.
- The notes are fully and unconditionally guaranteed by the parent company and key subsidiaries, enhancing credit support for noteholders.
- The company has committed to a registration rights agreement, which will allow holders to exchange their unregistered notes for registered, more liquid securities.
Negatives
- The notes are subject to restrictive covenants, including limitations on total debt, secured debt, and a debt service test, which could limit future financial flexibility.
- Failure to complete the exchange offer registration by the target date will result in an increased interest rate on the notes, penalizing the company and potentially impacting profitability.
Risks
- Risks and uncertainties related to market conditions could impact the company's financial performance.
- The company is subject to the impact of legislative, regulatory, and competitive changes in the industries in which it operates.
- New risk factors may emerge, and existing factors could cause actual results to differ materially from forward-looking statements.
- The company's ability to meet its debt obligations is subject to its financial performance and compliance with restrictive covenants.
Future Outlook
The company intends to use the net proceeds from the notes to repay amounts outstanding under its revolving credit facility and for other general corporate and working capital purposes. It is obligated to file a registration statement for an exchange offer to register the notes by June 17, 2026.
Industry Context
This debt issuance by Lineage OP, LP, a major player in temperature-controlled logistics, reflects a common corporate finance strategy to manage debt maturity profiles and secure funding for ongoing operations or strategic initiatives. The use of proceeds for revolving credit facility repayment suggests active balance sheet management. The restrictive covenants are typical for such debt instruments, aiming to protect bondholders by ensuring financial stability and limiting excessive leverage, which is standard practice in the capital-intensive logistics and real estate sectors.
Comparison to Industry Standards
- The 5.250% interest rate on the Senior Notes due 2030 is a specific term for this issuance and would require comparison to recent bond issuances by companies with similar credit profiles and maturity dates in the cold storage or logistics real estate industry to assess its competitiveness. Without specific comparable transactions, a direct assessment against global benchmarks is not feasible from this document alone.
- The restrictive covenants, such as the 60% total debt to total assets, 40% secured debt to total assets, and 1.5:1 EBITDA to interest expense ratios, are common in corporate indentures. Their favorability would depend on the company's current financial metrics relative to these thresholds and how they compare to covenants in debt agreements of direct competitors like Americold Realty Trust or other large industrial REITs.
Stakeholder Impact
- Shareholders: The debt issuance impacts the company's capital structure, potentially affecting leverage ratios and future earnings per share due to interest expenses. The use of proceeds for revolving credit facility repayment could improve liquidity and reduce short-term debt costs.
- Noteholders (Creditors): The new notes provide a fixed income investment opportunity with a specified interest rate and maturity. The guarantees from the parent and subsidiaries enhance the security of the investment. The registration rights agreement offers a path to increased liquidity for the notes.
- Existing Lenders (Revolving Credit Facility): Repayment of amounts outstanding under the revolving credit facility will reduce the company's obligations to these lenders, potentially freeing up capacity under that facility.
Next Steps
- Semi-annual interest payments on the notes will commence on January 15, 2026.
- The operating partnership and Guarantors are obligated to file a registration statement with the SEC for an exchange offer of the notes and related guarantees for a new issue of registered notes and guarantees.
- The exchange offer must be completed prior to June 17, 2026.
Key Dates
- 2024-12-31: End of the fiscal year for which the company's annual report on Form 10-K was filed, relevant for risk factor discussions.
- 2025-06-10: Date of the final offering memorandum for the notes.
- 2025-06-17: Date of report, issuance and sale of the 5.250% Senior Notes due 2030, and effective date of the Base Indenture, First Supplemental Indenture, and Registration Rights Agreement.
- 2026-01-15: First semi-annual interest payment date for the notes.
- 2026-06-17: Deadline for completing the exchange offer for the notes as per the Registration Rights Agreement.
- 2030-06-15: Par Call Date, after which the notes can be redeemed at 100% of principal plus accrued interest.
- 2030-07-15: Maturity date of the 5.250% Senior Notes due 2030.
Keywords
Senior Notes, Debt Issuance, Corporate Finance, SEC Filing, Unsecured Obligations, Guarantees, Registration Rights, Fixed Income, Capital Markets, Lineage OP LP, Lineage Inc, Corporate Debt
LINE
Lineage, INC
NASDAQ
Sector: Real Estate
Filings with Classifications
Capital raise
17 June 2025 4:19 PM
Debt Offering Announcement
- Lineage OP, LP issued and sold $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
- The net proceeds from the offering were approximately $489 million.
Capital raise
10 June 2025 8:57 PM
Debt Offering Announcement
- Lineage OP, LP, the Company's operating partnership, priced an offering of $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
- The notes were priced at 98.991% of the principal amount.
- The notes are senior unsecured obligations, fully and unconditionally guaranteed by Lineage, Inc. and certain subsidiaries.
- Proceeds are intended to repay amounts outstanding under the revolving credit facility and for general corporate and working capital purposes.
- The notes are offered only to qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S.
Capital raise
10 June 2025 9:09 AM
Capital Raise Announcement
- Lineage OP, LP, the operating partnership of Lineage, Inc., has commenced a private offering of senior notes.
- The notes will be senior unsecured obligations of the Operating Partnership and fully and unconditionally guaranteed by Lineage, Inc. and certain subsidiaries.
- The offering is a private placement to qualified institutional buyers under Rule 144A and to certain non-U.S. persons under Regulation S.
- The net proceeds are intended for repayment of outstanding amounts under the revolving credit facility and for general corporate and working capital purposes.
Worse than expected
30 April 2025 7:12 AM
Quarterly Report
- The company's net revenues decreased compared to the same period last year.
- The company reported a net loss attributable to Lineage, Inc.
- Same warehouse NOI decreased, reflecting customer inventory rationalization.
- General and administrative expenses increased significantly due to higher stock-based compensation expenses.
Worse than expected
30 April 2025 7:06 AM
Earnings Release
- Revenue decreased by (2.7)% compared to the previous year.
- Adjusted EBITDA decreased by (7.0)%, and the adjusted EBITDA margin also declined.
- Same warehouse NOI decreased by (7.9)%, indicating challenges in maintaining growth in existing facilities.
Better than expected
28 April 2025 7:08 AM
Proxy Statement
- The company's IPO was the largest of 2024 and the largest REIT IPO in history, reducing leverage to under 5x.
- Lineage generated $5.3 billion in total revenue and maintained a 78% same warehouse physical occupancy rate.
- Over $760 million was deployed in growth capital, including acquisitions and greenfield developments.
- The company reached its 100th patent and continued piloting the rollout of LinOS, its proprietary warehouse execution system.
Worse than expected
26 February 2025 7:16 AM
Annual Results
- The company experienced a net loss of $0.8 billion, which is worse than expected.
Capital raise
26 February 2025 7:16 AM
Annual Results
- The company may attempt to access property-level secured debt, bank debt and the unsecured bond market, in each case across multiple currencies and geographies, which would provide it with capital-raising flexibility to fund its operations.
Capital raise
26 February 2025 7:09 AM
Earnings Release and Investor Presentation
- The company completed the largest REIT IPO of all time, raising $5.1B.
- The company has the capacity to deploy more than $1.5 billion of capital in 2025.
Worse than expected
6 November 2024 7:13 AM
Quarterly Report
- The company reported a significant net loss of $543 million, compared to a net loss of $50 million in the same period last year.
- The company's acquisition, transaction, and other expenses were significantly higher than the previous year, primarily due to IPO-related costs.
- The company's economic and physical occupancy rates decreased compared to the same period last year.
Better than expected
6 November 2024 7:05 AM
Quarterly Report
- The company's AFFO growth of 51.8% and AFFO per share growth of 20.0% significantly exceeded expectations.
- The successful IPO and achievement of investment-grade credit ratings are also better than expected results.
Capital raise
21 August 2024 4:32 PM
Quarterly Report
- The company closed its IPO on July 26, 2024, raising approximately $4.875 billion in net proceeds.
- The company issued 56,882,051 shares of common stock at a price of $78.00 per share.
- The underwriters exercised their option to purchase an additional 8,532,307 shares of common stock on July 31, 2024.
Worse than expected
21 August 2024 4:32 PM
Quarterly Report
- The company reported a net loss of $80 million for the quarter, a significant decrease compared to the prior year.
- The company's same warehouse pool saw a decrease in NOI of $8 million or 2.3% due to revenue and cost of operations factors.
Capital raise
24 July 2024 8:43 PM
Registration Statement
- Lineage, Inc. is registering 11,364,358 additional shares of common stock for potential sale.
- The maximum aggregate offering price for these shares is $886,419,924.00.
- This capital raise could be used for various corporate purposes, including acquisitions or debt repayment.
Worse than expected
22 July 2024 6:55 AM
S-11/A Filing
- Preliminary estimates for the quarter ended June 30, 2024 indicate a decrease in total revenue, same warehouse NOI, average physical occupancy, and average economic occupancy compared to the same period in 2023.
Capital raise
22 July 2024 6:55 AM
S-11/A Filing
- Lineage is offering 47,000,000 shares of common stock in an IPO.
- The company estimates net proceeds of approximately $3.4 billion from the offering.
- The company intends to use the net proceeds to repay debt and for general corporate purposes.
- Norges Bank Investment Management has indicated an interest in purchasing up to $900 million in shares.
Worse than expected
16 July 2024 7:03 AM
Merger Announcement
- Preliminary estimates for the quarter ended June 30, 2024 indicate a decrease in same warehouse NOI compared to the same period in 2023.
Capital raise
16 July 2024 7:03 AM
Merger Announcement
- Lineage is offering 47,000,000 shares of its common stock in an initial public offering.
- The underwriters have the option to purchase up to an additional 7,050,000 shares.
- Norges Bank Investment Management has indicated an interest in purchasing up to $900 million in shares.
Capital raise
26 June 2024 9:08 AM
Initial Public Offering
- Lineage, Inc. is offering shares of its common stock in an initial public offering.
- The company intends to use the net proceeds from the offering to repay a $2.4 billion delayed-draw term loan and for general corporate purposes.
- A directed share program will reserve a percentage of the shares for sale to company insiders and partners.
Worse than expected
26 June 2024 9:08 AM
Initial Public Offering
- Lineage reported a net loss of $162.8 million for the twelve months ended March 31, 2024.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.