WPC
W P Carey INC
NYSE
8-K: W. P. Carey Inc. Issues €650 Million Senior Notes to Refinance Debt and for General Corporate Purposes
Sentiment:
Debt Offering Announcement
16 May 2024 4:10 PM
W. P. Carey Inc. has successfully completed a public offering of €650 million in senior notes due 2032, using the proceeds to repay existing debt and for general corporate needs.
Capital raise
W. P. Carey Inc. has raised €650 million through the issuance of 4.250% Senior Notes due 2032.
The offering was made pursuant to the company's automatic shelf registration statement and a final prospectus supplement.
Summary
- W. P. Carey Inc. has issued €650 million of 4.250% Senior Notes due in 2032.
- The offering was completed on May 16, 2024.
- The company intends to use the net proceeds to repay debt, including amounts outstanding under its $2.0 billion unsecured revolving credit facility and €500 million of 2.25% Senior Notes due July 2024.
- The notes are governed by an indenture dated March 14, 2014, and a ninth supplemental indenture dated May 16, 2024.
- The notes will pay interest annually on July 23, starting in 2024.
- The notes are redeemable at the company's option prior to April 23, 2032, at a price based on the greater of 100% of the principal or the present value of remaining payments discounted at a rate based on a German government bond plus 0.300%.
- After April 23, 2032, the notes are redeemable at 100% of the principal amount plus accrued interest.
- The company may also redeem the notes in whole if changes in tax laws require the payment of additional amounts.
Sentiment
Score: 7
Explanation: The sentiment is moderately positive as the company is securing financing at a reasonable rate and managing its debt profile. The offering is a routine financial activity for a company of this size and nature.
Positives
- The issuance of senior notes provides W. P. Carey with capital to refinance existing debt.
- The refinancing includes the repayment of a $2.0 billion revolving credit facility, which may improve the company's financial flexibility.
- The notes have a fixed interest rate of 4.250%, providing predictable interest expenses.
- The notes have a long maturity date of 2032, which provides long-term financing.
Negatives
- The company is taking on additional debt, which increases its overall leverage.
- The company will incur interest expenses on the new notes, which will impact profitability.
- The notes are subject to redemption risk, which could require the company to refinance at potentially higher rates in the future.
Risks
- Changes in interest rates could impact the cost of future debt refinancing.
- The company's ability to meet its debt obligations depends on its future financial performance.
- The company is subject to various financial covenants, which could restrict its operations if not met.
- Tax law changes could trigger early redemption of the notes, potentially at an inopportune time.
Future Outlook
The company intends to use the net proceeds from this offering for general corporate purposes and to repay indebtedness, including amounts outstanding under its $2.0 billion unsecured revolving credit facility and the €500 million aggregate principal outstanding of 2.25% Senior Notes due July 2024.
Industry Context
The issuance of senior notes is a common financing strategy for real estate investment trusts (REITs) like W. P. Carey to manage their capital structure and fund operations. This offering allows W. P. Carey to take advantage of current market conditions to secure long-term financing at a fixed rate.
Comparison to Industry Standards
- Other REITs, such as Realty Income (O) and Prologis (PLD), frequently issue debt to fund acquisitions and development projects.
- The 4.250% interest rate on these notes is within the typical range for investment-grade corporate debt, though specific rates vary based on market conditions and the issuer's credit rating.
- The use of proceeds to repay existing debt is a common practice to manage leverage and extend debt maturities, similar to strategies employed by other large REITs.
- The notes' redemption features are also standard, providing the company with flexibility while protecting investors.
Stakeholder Impact
- Shareholders may see a slight increase in leverage, but the refinancing could improve long-term financial stability.
- Creditors will be repaid with the proceeds of the new notes.
- The company's employees and customers are unlikely to be directly impacted by this transaction.
Next Steps
- The company will use the proceeds to repay existing debt and for general corporate purposes.
- The company will make annual interest payments on the notes starting July 23, 2024.
- The company may redeem the notes at its option under certain conditions.
Key Dates
- 2014-03-14: Date of the original indenture between W. P. Carey Inc. and U.S. Bank Trust Company, National Association.
- 2022-05-02: Date the company's automatic shelf registration statement on Form S-3 was filed with the Securities and Exchange Commission.
- 2024-05-07: Date of the Underwriting Agreement between W. P. Carey Inc. and the underwriters.
- 2024-05-09: Date of the final prospectus supplement relating to the Senior Notes.
- 2024-05-16: Date of the public offering of the Senior Notes and the Ninth Supplemental Indenture.
- 2024-07-23: First interest payment date for the Senior Notes.
- 2032-04-23: Par Call Date, three months prior to the Stated Maturity Date.
- 2032-07-23: Stated Maturity Date of the Senior Notes.
Keywords
Senior Notes, Debt Financing, Refinancing, Corporate Bonds, Fixed Income, Capital Markets, W. P. Carey, Indenture, Euro Denominated
WPC
W P Carey INC
NYSE
Sector: Real Estate
Filings with Classifications
Capital raise
1 May 2025 5:22 PM
Capital Raising Announcement
- W. P. Carey Inc. has entered into an Equity Sales Agreement to offer and sell shares of its common stock, with an aggregate offering price of up to $1,250,000,000.
- The shares may be offered and sold from time to time through various agents.
- W. P. Carey may also sell shares to an agent as principal for its own account.
Worse than expected
30 April 2025 4:08 PM
Quarterly Report
- Net income attributable to W. P. Carey decreased due to higher losses from foreign debt remeasurement and increased allowance for credit losses.
Better than expected
1 April 2025 5:10 PM
Credit Agreement Amendment
- The amendment extends the maturity of a significant €500 million term loan by three years, improving the company's debt maturity profile.
- It introduces the potential for lower borrowing costs through a new pricing tier linked to higher credit ratings.
- The removal of specific spread adjustments on USD SOFR and CAD CORRA borrowings offers potential interest savings.
Worse than expected
12 February 2025 4:27 PM
Annual Results
- Total revenues decreased in 2024 as compared to 2023, primarily due to lower lease revenues and lower operating property revenues.
- Net income attributable to W. P. Carey decreased in 2024 as compared to 2023, primarily due to lower gain on sale of real estate, non-cash unrealized losses recognized on investment in shares of Lineage, and the impact of the Spin-Off and the Office Sale Program.
- AFFO decreased in 2024 as compared to 2023, primarily due to the impact of the Spin-Off and Office Sale Program.
Capital raise
12 February 2025 4:27 PM
Annual Results
- The company may access the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings, as well as term loans and other bank debt.
- The company may use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from term loans or other bank debt, proceeds from dispositions of properties (including the Office Sale Program), and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Program, in order to meet our short-term and long-term liquidity needs.
Worse than expected
11 February 2025 4:10 PM
Earnings Release
- Net income attributable to W. P. Carey decreased by 67.4% in the fourth quarter compared to the same period in 2023.
- Full year AFFO per diluted share decreased by 9.3% from $5.18 in 2023 to $4.70 in 2024.
- Dividends declared during 2024 decreased by 14.2% compared to 2023.
- Revenues, including reimbursable costs, for the 2024 full year totaled $1.58 billion, down 9.2% from $1.74 billion for the 2023 full year.
Capital raise
13 November 2024 4:28 PM
Debt Offering Announcement
- W. P. Carey Inc. is raising $600 million through the issuance of 3.700% Senior Notes due in 2034.
- The offering is being underwritten by Barclays Bank PLC, BNP PARIBAS, J.P. Morgan Securities plc, and Bank of Montreal, London Branch.
Worse than expected
30 October 2024 4:06 PM
Quarterly Report
- The company's revenue, net income, and AFFO all decreased compared to the same period last year, indicating worse than expected results.
Worse than expected
29 October 2024 4:10 PM
Quarterly Report
- The company's net income and AFFO per share decreased compared to the same quarter last year, indicating worse results.
Worse than expected
15 October 2024 6:10 AM
Current Report
- The bankruptcy filing of a major tenant is generally considered a negative event that could impact future revenue.
Worse than expected
31 July 2024 4:06 PM
Quarterly Report
- Total revenues decreased due to lower lease revenues and operating property revenue.
- Net income attributable to W. P. Carey decreased due to the impact of the spin-off, asset sales, and impairment charges.
- AFFO decreased due to the impact of the spin-off, asset sales, lease restructurings and property vacancies.
Worse than expected
30 July 2024 4:06 PM
Quarterly Report
- The company's AFFO per diluted share decreased by 14.0% compared to the same quarter last year.
- The company lowered its full-year AFFO guidance by two cents per diluted share.
- Revenues decreased by 13.9% compared to the same quarter last year.
Capital raise
28 June 2024 4:15 PM
Debt Issuance Announcement
- W. P. Carey Inc. has raised $400 million through the issuance of 5.375% Senior Notes due 2034.
- The proceeds from this offering will be used for general corporate purposes, including potential investments and debt repayment.
Capital raise
20 June 2024 4:32 PM
Debt Offering Announcement
- The document details a $400 million offering of 5.375% Senior Notes due 2034.
- The company intends to use the net proceeds for general corporate purposes, including funding potential future investments and repaying indebtedness.
Capital raise
16 May 2024 4:10 PM
Debt Offering Announcement
- W. P. Carey Inc. has raised €650 million through the issuance of 4.250% Senior Notes due 2032.
- The offering was made pursuant to the company's automatic shelf registration statement and a final prospectus supplement.
Capital raise
8 May 2024 5:25 PM
Debt Offering Announcement
- W. P. Carey Inc. is raising $650 million through the issuance of senior notes.
- The notes are being offered to the public through an underwritten offering.
- The proceeds will be used for general corporate purposes and to repay existing debt.
Capital raise
1 May 2024 4:09 PM
Quarterly Report
- The company may use the at-the-market program (ATM Program) to issue additional equity securities.
- The company may also access the capital markets through additional debt offerings.
Worse than expected
1 May 2024 4:09 PM
Quarterly Report
- The company's revenue and net income decreased year-over-year, indicating worse performance compared to the previous year.
- AFFO also decreased, which is a key metric for REIT performance, suggesting a decline in operational profitability.
Worse than expected
30 April 2024 4:04 PM
Quarterly Report
- Net income and AFFO per share were down compared to the same period last year, indicating worse results.
Capital raise
9 February 2024 4:56 PM
Annual Results
- The company may access the capital markets through additional debt and equity offerings, as well as term loans and other bank debt.
- The company may issue common stock through its ATM Program.
Worse than expected
9 February 2024 4:56 PM
Annual Results
- The company's net income from Investment Management decreased due to the cessation of fees from CPA:18 Global.
- The company's fourth quarter dividend of $0.860 per share reflects a lower payout ratio.
Worse than expected
9 February 2024 7:39 AM
Quarterly Report
- The company's AFFO per diluted share for the fourth quarter and full year 2023 decreased compared to the previous year.
- The company's 2024 AFFO guidance is lower than the 2023 full year AFFO.
- Net income attributable to W. P. Carey decreased by 31.1% in the fourth quarter of 2023 compared to the same period in 2022.
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.