LOS ANGELES--(BUSINESS WIRE)--
Kilroy Realty Corporation(NYSE:KRC) (the “Company”) today
announced that its operating partnership, Kilroy Realty, L.P., has
priced an underwritten public offering of $400.0 million aggregate
principal amount of 4.750% senior notes due 2028 (the “Notes”). The
Notes will pay interest semi-annually at a rate of 4.750% per annum on
June 15 and December 15 each year, commencing on June 15, 2019, and
mature on December 15, 2028. The Notes were priced at 99.634% of the
principal amount with a yield to maturity of 4.796%. The offering is
expected to close on November 29, 2018, subject to the satisfaction of
customary closing conditions.
J.P. Morgan, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BBVA,
Jefferies and Wells Fargo Securities acted as joint book-running
managers, Barclays, Citigroup, Goldman Sachs & Co. LLC, KeyBanc Capital
Markets, MUFG, Scotiabank and US Bancorp acted as senior co-managers and
BNP PARIBAS, Comerica Securities, RBC Capital Markets and SMBC Nikko
acted as co-managers of the offering.
Net proceeds from the offering will be approximately $395.2 million,
after deducting the underwriting discount and the Company’s estimated
expenses. The Company intends to allocate an amount equal to the net
proceeds from the offering to one or more Eligible Green Projects (as
defined), which may include the development or redevelopment of such
projects.
Pending the allocation of an amount equal to the net proceeds from the
offering to Eligible Green Projects, the Company intends to use the net
proceeds to redeem or repay indebtedness and may also hold net proceeds
in cash and cash equivalents. Such indebtedness to be redeemed or repaid
will include all $250.0 million aggregate principal amount (plus the
make-whole premium and accrued and unpaid interest) of the operating
partnership’s 6.625% Senior Notes due 2020 (the “2020 Notes”) and may
include borrowings under the operating partnership’s revolving credit
facility and term loan facility.
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 have been filed with the SEC and are
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 Merrill
Lynch, Pierce, Fenner & Smith Incorporated at 1-800-294-1322.
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
offer or 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 2020 Notes.
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 over 70 years,
Kilroy Realty Corporation has owned, developed, acquired and managed
real estate assets primarily in the coastal regions of Greater Los
Angeles, Orange County, San Diego, the San Francisco Bay Area and
Greater Seattle. At September 30, 2018, Kilroy Realty Corporation’s
stabilized portfolio totaled approximately 13.9 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 the Company’s 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 the Company’s control. Accordingly, actual performance,
results and events may vary materially from those indicated or implied
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 the Company’s liquidity
and financial conditions and those of its tenants; adverse economic or
real estate conditions generally, and specifically, in the States of
California and Washington; risks associated with the Company’s
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; the Company’s
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 the Company’s ability to manage interest rate exposure; the
availability of financing on attractive terms or at all, which may
adversely impact the Company’s future interest expense and its ability
to pursue development, redevelopment and acquisition opportunities and
refinance existing debt; a decline in real estate asset valuations,
which may limit the Company’s 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 the Company’s
development and redevelopment properties; increases in anticipated
capital expenditures, tenant improvement and/or leasing costs; defaults
on leases for land on which some of the Company’s properties are
located; adverse changes to, or enactment or implementations of, tax
laws or other applicable laws, regulations or legislation, as well as
business and consumer reactions to such changes; risks associated with
joint venture investments, including the Company’s lack of sole
decision-making authority, the Company’s reliance on co-venturers’
financial condition and disputes between the Company and its
co-venturers; environmental uncertainties and risks related to natural
disasters; and the Company’s ability to maintain its status as a REIT.
These factors are not exhaustive and additional factors could adversely
affect the Company’s business and financial performance. For a
discussion of additional factors that could materially adversely affect
the Company’s and the operating partnership’s business and financial
performance, see the factors included under the caption “Risk Factors”
in the Company’s and the operating partnership’s annual report on Form
10-K for the year ended December 31, 2017 and in the prospectus
supplement and related prospectus for the offering, as well as the
Company’s and the operating partnership’s 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. The Company
assumes 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 the Company is required
to do so in connection with its ongoing requirements under federal
securities laws.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181114005899/en/
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