Realty Income Corporation has priced a $750 million offering of senior unsecured convertible notes due 2029, carrying a 3.5% annual coupon payable semi‑annually and callable at the company’s option before maturity. The private Rule 144A transaction allows initial purchasers to convert the notes into 14.4051 shares per $1,000 principal, setting a conversion price of $69.42—approximately a 20% premium to the last closing price of $57.85 on January 5, 2026.
Initial purchasers also have the right to buy an additional $112.5 million of notes within 13 days of the offering. Net proceeds are expected to be about $735 million, or $845.5 million if the option is fully exercised. The company plans to use the proceeds to repay $500 million of senior notes maturing on January 13, 2026, fund acquisitions, repurchase roughly 1.8 million shares for $102.1 million, and support other general corporate purposes.
The convertible structure offers Realty Income a lower cost of capital than straight debt while preserving flexibility. The 20% premium reflects strong investor demand and confidence in the company’s dividend track record, investment‑grade credit ratings (Moody’s A3 and S&P A‑), and robust liquidity of $3.7 billion. These factors give the company a solid foundation to service the debt and pursue growth initiatives.
By replacing the maturing senior notes, the offering reduces short‑term debt exposure and extends the maturity profile, aligning with Realty Income’s proactive refinancing strategy and helping maintain a strong balance sheet. The debt repayment also frees cash that can be deployed toward strategic opportunities.
Proceeds earmarked for acquisitions support the company’s expansion strategy, which has included the $9.3 billion acquisition of Spirit Realty Capital in 2024. Realty Income’s focus on freestanding, triple‑net leased properties and diversification into industrial, gaming, and office sectors underpins its growth trajectory and positions it to capture new market opportunities.
The allocation of $102.1 million for share repurchases signals management’s confidence in the stock’s valuation and serves to offset potential dilution from the convertible notes while enhancing shareholder value.
The offering was priced at a 20% premium to the last closing price, indicating robust demand from qualified institutional buyers. The private nature of the Rule 144A transaction limits public market impact but underscores the company’s strong capital‑raising capability.
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