LOS ANGELES--(BUSINESS WIRE)--
Kilroy Realty Corporation (NYSE:KRC) today announced that its operating
partnership, Kilroy Realty, L.P., has priced an underwritten public
offering of $425.0 million aggregate principal amount of 3.450% senior
notes due 2024 (the “Notes”). The Notes will pay interest semi-annually
at a rate of 3.450% per annum on June 15 and December 15 each year and
mature on December 15, 2024. The Notes were priced at 99.870% of the
principal amount with a yield to maturity of 3.471%. The offering is
expected to close on December 11, 2017, subject to the satisfaction of
customary closing conditions. J.P. Morgan, US Bancorp, Barclays, BofA
Merrill Lynch and Wells Fargo Securities acted as joint book-running
managers; BBVA, Citigroup, and SMBC Nikko acted as senior co-managers;
and BNP PARIBAS, Comerica Securities, KeyBanc Capital Markets, MUFG, PNC
Capital Markets LLC, RBC Capital Markets and Scotiabank acted as
co-managers of the offering.
Net proceeds from the offering will be approximately $421.0 million,
after deducting underwriting discounts and our estimated expenses. The
Company intends to use the net proceeds from the offering to redeem all
$325.0 million aggregate principal amount (plus the make-whole amount
and accrued and unpaid interest) of the operating partnership’s 4.800%
senior notes due 2018 and to use the remaining net proceeds for general
corporate purposes, which may include funding development projects,
acquiring land and properties and repaying other outstanding
indebtedness. Pending application of the net proceeds for those
purposes, the Company may use the net proceeds from the offering to
repay borrowings under the operating partnership’s revolving credit
facility and/or temporarily invest such net proceeds in marketable
securities.
The Notes are being offered pursuant to an effective shelf registration
statement filed by Kilroy Realty Corporation and Kilroy Realty, L.P.
with the Securities and Exchange Commission (“SEC”). The offering will
be made only by means of the prospectus supplement and accompanying
prospectus. The preliminary prospectus supplement and accompanying
prospectus related to the offering has been filed with the SEC and is
available on the SEC’s website at http://www.sec.gov.
A copy of the final prospectus supplement and accompanying prospectus
related to the offering may be obtained, when available, by calling J.P.
Morgan Securities LLC collect at (212) 834-4533; or by calling U.S.
Bancorp Investments, Inc. toll-free at (877) 558-2607.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor will there be any
sale of these securities in any jurisdiction in which, or to any person
to whom, such offer, solicitation or sale would be unlawful. This press
release shall not constitute a notice of redemption under the optional
redemption provisions of the indenture governing the operating
partnership’s 4.800% senior notes due 2018.
About Kilroy Realty Corporation.Kilroy Realty
Corporation, a member of the S&P MidCap 400 Index, is a real estate
investment trust active in major West Coast markets. For nearly 70
years, Kilroy Realty Corporation has owned, developed, acquired and
managed real estate assets primarily in the coastal regions of Los
Angeles, Orange County, San Diego, the San Francisco Bay Area and
greater Seattle. At September 30, 2017, Kilroy Realty Corporation’s
stabilized portfolio totaled approximately 13.7 million square feet of
office properties and 200 residential units.
Forward-Looking Statements. This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements are based
on our current expectations, beliefs and assumptions, and are not
guarantees of future performance. Forward-looking statements are
inherently subject to uncertainties, risks, changes in circumstances,
trends and factors that are difficult to predict, many of which are
outside of our control. Accordingly, actual performance, results and
events may vary materially from those indicated in the forward-looking
statements, and you should not rely on the forward-looking statements as
predictions of future performance, results or events. Numerous factors
could cause actual future performance, results and events to differ
materially from those indicated in the forward-looking statements,
including, among others: global market and general economic conditions
and their effect on our liquidity and financial conditions and those of
our tenants; adverse economic or real estate conditions generally, and
specifically, in the States of California and Washington; risks
associated with our investment in real estate assets, which are
illiquid, and with trends in the real estate industry; defaults on or
non-renewal of leases by tenants; any significant downturn in tenants’
businesses; our ability to re-lease property at or above current market
rates; costs to comply with government regulations, including
environmental remediation; the availability of cash for distribution and
debt service and exposure to risk of default under debt obligations;
increases in interest rates and our ability to manage interest rate
exposure; the availability of financing on attractive terms or at all,
which may adversely impact our future interest expense and our ability
to pursue development, redevelopment and acquisition opportunities and
refinance existing debt; a decline in real estate asset valuations,
which may limit our ability to dispose of assets at attractive prices or
obtain or maintain debt financing, and which may result in write-offs or
impairment charges; significant competition, which may decrease the
occupancy and rental rates of properties; potential losses that may not
be covered by insurance; the ability to successfully complete
acquisitions and dispositions on announced terms; the ability to
successfully operate acquired, developed and redeveloped properties; the
ability to successfully complete development and redevelopment projects
on schedule and within budgeted amounts; delays or refusals in obtaining
all necessary zoning, land use and other required entitlements,
governmental permits and authorizations for our development and
redevelopment properties; increases in anticipated capital expenditures,
tenant improvement and/or leasing costs; defaults on leases for land on
which some of our properties are located; adverse changes to, or
enactments or implementations of, tax laws, whether as a result of the
proposed changes currently under consideration by the U.S. Congress or
otherwise, or other applicable laws, regulations or legislation; risks
associated with joint venture investments, including our lack of sole
decision-making authority, our reliance on co-venturers’ financial
condition and disputes between us and our co-venturers; environmental
uncertainties and risks related to natural disasters; and our ability to
maintain our status as a REIT. These factors are not exhaustive and
additional factors could adversely affect our business and financial
performance. For a discussion of additional factors that could
materially adversely affect our business and financial performance, see
the factors included under the caption “Risk Factors” in our annual
report on Form 10-K for the year ended December 31, 2016 and in the
prospectus supplement and related prospectus for this offering, as well
as our other filings with the Securities and Exchange Commission that
are incorporated by reference in such prospectus supplement and
accompanying prospectus. All forward-looking statements are based on
currently available information, and speak only as of the date on which
they are made. We assume no obligation to update any forward-looking
statement made in this press release that becomes untrue because of
subsequent events, new information or otherwise, except to the extent we
are required to do so in connection with our ongoing requirements under
federal securities laws.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171127005916/en/
Kilroy Realty Corporation
Tyler H. Rose
Executive Vice
President and Chief Financial Officer
(310) 481-8484
or
Michelle
Ngo
Senior Vice President and Treasurer
(310) 481-8581
Source: Kilroy Realty Corporation