Agree Realty Prices $350M of 2.900% Senior Notes at 99.927%
Agree Realty Corporation’s ADC operating partnership, Agree Limited Partnership, has priced a public offering of 2.900% senior unsecured notes due 2030, with the principal amount of $350 million.
The notes have been priced at 99.927% of the principal amount, with an effective yield to maturity of 2.908%. Conditional on the satisfaction of certain closing norms, the notes offering is anticipated to close on Aug 17, 2020.
The company intends to use the net proceeds from the offering to fund acquisitions and development activities. Moreover, the proceeds will be used for general working needs and other corporate purposes, including the repayment of the outstanding balance on its revolving credit facility.
Notably, amid these testing times, liquidity has become a focal point and concern for companies as they make efforts to shore up liquidity to protect against unforeseeable events. Hence, Agree Realty’s efforts to strengthen its liquidity and tap the debt market amid a low interest-rate environment are a strategic fit.
Per management, "The pricing of our inaugural issuance is a meaningful step in our continued growth while providing our Company with another source of efficient long-term capital."
Notably, common equity proceeds raised through the first half of 2020 along with the note offering has enabled the company to raise the capital of more than $1.15 billion year to date.
Additonally, in the first half of 2020, it acquired 126 properties for $499.5 million. Moreover, in its second-quarter earnings, the company increased the 2020 acquisition volume outlook to $900 million-$1.1billion from the previously mentioned $700-$800 million. Hence, the notes offering further strengthen its pristine balance sheet and will aid the company to pursue investment opportunities in the future.
Moreover, shares of this Zacks Rank #3 (Hold) company have lost 8.4% over the past year compared with the industry’s decline of 17.9%.
Stocks to Consider
City Office REIT, Inc.’s CIO funds from operations (“FFO”) per share estimate for the ongoing year have been revised 3.7% upward to $1.13 over the past week. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
STAG Industrial, Inc. STAG FFO per share estimate for 2020 has been revised marginally upward to $1.85 over the past week. It currently carries a Zacks Rank of 2.
Cousins Properties Incorporated’s CUZ Zacks Consensus Estimate for 2020 FFO per share has revised 1% upward to $2.77 over the past month. The company currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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