ROYAL OAK, Mich. - Agree Realty Corporation (NYSE:ADC) revealed that its operating partnership, Agree Limited Partnership, has priced a public offering of $450 million in senior unsecured notes at an effective yield to maturity of 5.779%.
The notes, due in 2034, are to be guaranteed by Agree Realty and certain subsidiaries. The offering is slated for closure on May 13, 2024, conditional on typical closing requirements.
The proceeds from the offering are intended for general corporate use, including the reduction of the outstanding amount under its senior unsecured revolving credit facility, and to finance property acquisitions and development projects.
According to Peter Coughenour, the company's CFO, the move is designed to support growth and improve liquidity, which post-offering will exceed $1.3 billion. The company has also engaged in forward starting swaps to decrease the effective interest rate of the notes, reflecting its commitment to sound balance sheet management.
The offering is being managed by a syndicate of banks, including PNC Capital Markets LLC, Citigroup, J.P. Morgan, Wells Fargo (NYSE:WFC) Securities, BofA Securities, and Mizuho Securities as joint book-running managers. Additionally, Morgan Stanley (NYSE:MS), Raymond James, Regions Securities LLC, Stifel, and US Bancorp (NYSE:USB) are serving as co-managers.
A registration statement for these securities has been filed with the U.S. Securities and Exchange Commission (SEC) and has become automatically effective. The offering is being made solely by prospectus supplement and accompanying prospectus available from the SEC.
Agree Realty Corporation, a publicly traded real estate investment trust, specializes in the acquisition and development of properties net leased to retail tenants. As of March 31, 2024, the company managed a portfolio of 2,161 properties across 49 states, totaling approximately 44.9 million square feet of gross leasable area.
This news is based on a press release statement and contains forward-looking statements subject to risks and uncertainties, including those related to the current economic climate and its effect on the company's business and the real estate market.
InvestingPro Insights
Agree Realty Corporation (NYSE:ADC) has demonstrated a strong financial discipline that's reflected in its strategic decisions and recent pricing of senior unsecured notes. Looking at the data from InvestingPro, several key points stand out that potential investors might find pertinent to the company's financial health and future outlook.
InvestingPro Data:
1. Agree Realty Corporation has a commendable track record of raising its dividend for 11 consecutive years, indicating a robust and consistent income stream for shareholders.
2. Analysts are showing confidence in the company's performance, with 2 analysts having revised their earnings upwards for the upcoming period.
3. The company's liquid assets currently exceed its short-term obligations, suggesting a solid liquidity position which is critical for the company's operational flexibility and ability to manage debt.
InvestingPro Tips:
- Agree Realty's commitment to growth is further underscored by the fact that it has maintained dividend payments for an impressive 31 consecutive years, a testament to its stability and reliability as an investment.
- The company is also trading at a high earnings multiple, which might imply that the market has high expectations for its future growth, a factor to consider when evaluating the stock.
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