CINCINNATI - Phillips Edison & Company, Inc. (NASDAQ:PECO), a leading owner and operator of grocery-anchored shopping centers, has announced the pricing of a public offering of $350 million in senior unsecured notes at a rate of 4.950%, maturing on January 15, 2035. The notes, priced at 98.458% of the principal amount, are set to be fully and unconditionally guaranteed by PECO.
The offering, expected to settle on September 12, 2024, subject to customary closing conditions, was managed by a syndicate of banks, including J.P. Morgan, BMO Capital Markets, and BofA Securities, among others. The proceeds from the sale are intended for general corporate purposes which may include property acquisitions, debt repayment, and capital improvements.
Phillips Edison & Company, founded in 1991, has established a significant presence in the U.S. retail real estate market, managing 306 shopping centers across 31 states as of June 30, 2024. The company's portfolio primarily features shopping centers anchored by top grocery stores like Kroger (NYSE:KR) and Publix.
The notes offering aligns with PECO's strategic initiatives to strengthen its financial position and support growth. While the company has expressed optimism about its future strategies and initiatives, it is important to note that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially.
This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offering is made only by means of the prospectus supplement and accompanying prospectus, which are available on the SEC's website.
In other recent news, Phillips Edison & Company (PECO) reported substantial growth for the second quarter of 2024. The company's strategy, focusing on grocery-anchored shopping centers, has yielded impressive results. PECO also announced a joint venture with Cohen & Steers, aiming to acquire additional shopping centers. The company remains optimistic about achieving its full-year net acquisition target of $200 million to $300 million.
In terms of financial health, PECO maintains a robust balance sheet with $743 million of liquidity and a net debt to adjusted EBITDA ratio of 5.1 times. The company also plans to invest $40 million to $50 million annually in development and repositioning projects. Despite anticipating higher bad debt as a percentage of revenue next year, PECO expects to continue benefiting from positive macroeconomic trends.
PECO's recent developments include leveraging AI to enhance operations, which led to a digital innovation award. The company also expects an acceleration in same-store NOI growth in the latter half of the year. These developments, along with the company's strong retention rates and leasing spreads, indicate a positive outlook for the company's future operations.
InvestingPro Insights
As Phillips Edison & Company (NASDAQ:PECO) ventures into the public offering of senior unsecured notes, investors and market watchers are closely analyzing the company's financial metrics and performance indicators. According to the latest data from InvestingPro, PECO boasts a robust gross profit margin of 71.23% for the last twelve months as of Q2 2024. This impressive margin underscores the company's efficiency in managing its cost of goods sold and its ability to retain a significant portion of revenue as gross profit.
PECO's commitment to shareholder returns is evident through its consistent dividend growth, having raised its dividend for 4 consecutive years, with a dividend yield standing at 3.32% as of the end of 2024. This reflects the company's confidence in its financial health and its dedication to providing value to its shareholders. Additionally, PECO's price is trading near its 52-week high, at 99.08% of the peak, signaling strong market confidence and a potentially bullish outlook among investors.
Investors considering PECO should note that the company is trading at a high earnings multiple, with a P/E ratio of 76.85. This suggests a premium valuation, which may be attributed to the company's strategic market position and growth prospects. For those seeking a deeper dive into the company's valuation and performance, InvestingPro offers additional insights, including 7 more InvestingPro Tips that could provide a more nuanced understanding of PECO's investment potential. Visit https://www.investing.com/pro/PECO for a comprehensive analysis.
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