W. P. Carey (NYSE:WPC) Inc., a well-established real estate investment trust (REIT), announced today that it has successfully completed a public offering of $400 million in senior unsecured notes with a 5.375% interest rate, maturing on June 30, 2034. The completion of the offering occurred today, with the settlement also taking place on the same day.
The offering was conducted under the company's automatic shelf registration statement filed on May 2, 2022, and a final prospectus supplement dated June 18, 2024. W. P. Carey has expressed that the net proceeds from the offering will be used for general corporate purposes, which include funding future investments such as acquisitions and development projects, as well as for repaying certain debts.
The senior notes are direct obligations of W. P. Carey Inc. and will rank equally with all of the company's existing and future unsecured and unsubordinated indebtedness. Interest on these notes is payable semi-annually on June 30 and December 30, with the first payment due on December 30, 2024.
The company has the option to redeem the senior notes at any time at a make-whole redemption price, with the redemption price being 100% of the principal amount if the redemption occurs on or after March 30, 2034, which is three months prior to the maturity date.
The terms of the senior notes are governed by an indenture, which includes covenants requiring W. P. Carey to maintain a specified ratio of unencumbered assets to unsecured debt and limits on incurring additional secured and unsecured indebtedness. The indenture also restricts the company's ability to merge, consolidate, or transfer assets unless certain conditions are met.
The offering and the details of the senior notes are contained within the Tenth Supplemental Indenture, as part of the existing Base Indenture with U.S. Bank Trust Company, National Association, acting as trustee.
This financial move is based on the company's SEC filing and is part of W. P. Carey's broader strategy to manage its capital structure and finance its growth initiatives. The company's stock is traded on the New York Stock Exchange under the ticker symbol NYSE:WPC.
In other recent news, W. P. Carey Inc. has made notable strides in its financial performance and strategic investments. The company recently priced a public offering of senior unsecured notes valued at $400 million, maturing in 2034, with the net proceeds intended for general corporate purposes including potential funding of future investments and debt repayment.
BofA Securities, J.P. Morgan, PNC Capital Markets, and U.S. Bancorp Investments served as the joint book-running managers for the offering.
In its Q1 2024 earnings report, W. P. Carey highlighted strategic investments totaling $375 million and a robust pipeline of over $500 million. The company's liquidity position increased to $2.8 billion, despite a decrease in Adjusted Funds From Operations (AFFO) per share to $1.14.
On the analyst front, UBS set a neutral rating on W. P. Carey shares, citing potential challenges in growth due to high interest rates and projected that W. P. Carey's AFFO will grow by 1.6% by 2025. In contrast, RBC Capital Markets maintained an outperform rating on W. P. Carey, even as it cut its price target to $63 due to the company's Q1 2024 performance not meeting expectations.
These recent developments underscore W. P. Carey's ongoing financial activities and the analysts' perspectives on the company's performance.
InvestingPro Insights
W. P. Carey Inc. continues to demonstrate its financial prudence and strategic growth initiatives, as reflected in the company's real-time financial metrics. With a robust market capitalization of $12.02 billion and a Price/Earnings (P/E) ratio of 20.67, the company maintains a strong position in the market. Impressively, W. P. Carey's gross profit margin stands at a stellar 92.06% over the last twelve months as of Q1 2024, underscoring the company's efficiency in generating profits from its revenues.
Investors may find comfort in the company's consistent performance, as evidenced by its ability to maintain dividend payments for 27 consecutive years. The current dividend yield is at 6.35%, which is particularly attractive for those seeking steady income streams. Moreover, the company's valuation suggests a strong free cash flow yield, an InvestingPro Tip that highlights the potential for favorable returns on investment.
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