Stock Offering from CommonWealth - Analyst Blog
26 Fevereiro 2013 - 10:30AM
Zacks
CommonWealth REIT (CWH) declared a public
offering of 27 million shares. Further, the company anticipates
that the underwriters will be provided a 30-day option to buy up to
an additional 4 million common shares.
The proceeds from the offering will be primarily utilized to redeem
nearly $450 million worth of unsecured notes due between 2014 and
2016. CommonWealth announced this in a tender offer issued
concurrently. Further, the remainder of proceeds will be used for
repaying other debt and for general business purposes.
The joint book-running mangers for the offering are
Citigroup Inc. (C), Merrill Lynch – a wing of
Bank of America Corporation (BAC), Morgan
Stanley (MS) and UBS Investment Bank. Further, Jefferies
Group, Inc. and RBC Capital Markets are acting as joint lead
managers for the offering.
Earlier in 2012, CommonWealth had announced a public offering of
$175 million of 5.75% unsecured senior notes due Aug 1, 2042. The
proceeds from these were utilized for redeeming 6 million shares of
7 1/8% Series C Cumulative preferred shares and partially funded
the acquisitions completed in the third quarter of 2012.
For CommonWealth, though the public offering would result in share
dilution, the repayment of debt is encouraging, as it would reduce
interest expenses. In 2012, interest expenses (including net
amortization of debt discounts and deferred financing fees) were
$204.2 million, up 4.7% year-over-year. Further, as of Dec 31,
2012, senior unsecured debt was nearly $3.0 billion, rising 4.5%
from Dec 31, 2011.
Currently, CommonWealth retains a Zacks Rank #3 (Hold).
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
COMMONWEALTH RE (CWH): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
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