Highwoods Prices Senior Notes

Zacks

The operating partnership of Highwoods Properties Inc (HIW), a real estate investment trust (:REIT), has recently priced 3.625% senior unsecured notes worth $250 million. The notes are scheduled to mature in January 2023 to yield 3.752% on maturity.

The net proceeds are intended to be utilized to reduce debt outstanding under the company's $475 million revolving credit facility and for general corporate purposes. At the end of third quarter 2012, Highwoods had $9.1 million in cash and cash equivalents.

Subsequent to the end of third quarter 2012, the company extended the maturity of a $200 million unsecured term loan scheduled to mature in February 2016 to January 2018. The modified loan carries interest at LIBOR plus 1.65%, a 55 basis point reduction from the original interest rate of LIBOR plus 2.20%.

Wells Fargo Securities, LLC, part of Wells Fargo & Company (WFC), and Jefferies & Company, Inc., part of Jefferies Group, Inc (JEF) acted as joint book-running managers for the offering.

Highwoods is one of the largest owners and operators of suburban office, industrial and retail properties in the Southeastern and Midwestern U.S., providing a complete line of real estate services to its customers and third parties through a fully-integrated organization. The company maintains a conservative and flexible balance sheet with ample liquidity and minimal debt maturities that enable it to capitalize on potential acquisition opportunities to fuel its top-line growth.

Highwoods currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We also maintain our long-term Neutral recommendation on the stock.

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