Brandywine Realty Trust Prices $150 Million of 8.875% Guaranteed Notes Due 2029 With a Re-Offer Yield of 7.039%

Rhea-AI Summary

Brandywine Realty Trust (NYSE: BDN) has announced the pricing of $150 million 8.875% guaranteed notes due 2029 through its operating partnership. The notes are priced at 106.000% of principal amount with a re-offer yield of 7.039%. These notes will be part of the existing series of $400 million 8.875% guaranteed notes issued in April 2024. Interest payments will be made semi-annually starting October 12, 2025. The offering is expected to close on June 27, 2025, generating approximately $148 million in net proceeds. The funds will be used to repay borrowings under their $600 million unsecured revolving credit facility, partially repay secured debt, and for general corporate purposes including potential debt retirement.

Positive

• Additional $150 million in funding strengthens company's financial position
• Re-offer yield of 7.039% indicates strong market confidence
• Proceeds will help optimize debt structure by repaying revolving credit facility and secured debt

Negative

• High interest rate of 8.875% increases debt servicing costs
• Additional debt could impact company's leverage ratios
• Premium pricing at 106% of principal amount increases effective cost of capital

Insights

Corporate Finance Specialist

Brandywine's $150M note issuance with 7.039% yield strengthens liquidity while managing high-interest debt in a challenging real estate market.

Brandywine Realty Trust is expanding its 2029 notes series by issuing an additional $150 million at a premium price of 106% of face value, resulting in a 7.039% yield for investors—significantly lower than the notes' 8.875% coupon rate. This premium pricing suggests strong investor demand despite high nominal interest rates, enabling Brandywine to effectively secure cheaper financing than the headline rate indicates.

The transaction strategically addresses Brandywine's debt management by targeting three areas: repaying revolving credit facility borrowings (improving liquidity flexibility), reducing secured debt (potentially freeing encumbered assets), and potentially retiring other debt obligations. This comprehensive approach indicates management is actively working to optimize the capital structure amid challenging commercial real estate conditions.

By adding to an existing $400 million notes series originally issued in April 2024, Brandywine is enhancing the liquidity of these securities while maintaining consistent debt maturity schedules. The $148 million in expected net proceeds represents an efficient capital raise with minimal transaction expenses relative to the issuance size. The impressive syndicate of nine financial institutions led by major banks demonstrates strong institutional support for Brandywine's debt, a positive signal in today's cautious lending environment for real estate investment trusts.

PHILADELPHIA, June 17, 2025 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (the “Company”) (NYSE: BDN) announced today that its operating partnership, Brandywine Operating Partnership, L.P. (the “Operating Partnership”), has priced an underwritten public offering of $150 million of its 8.875% guaranteed notes due 2029 (the “Notes”). Interest on the Notes will be payable semi-annually on April 12 and October 12 of each year, commencing on October 12, 2025.

The Notes are being offered to investors at a price of 106.000% of their principal amount, plus accrued interest from April 12, 2025, with a re-offer yield of 7.039%. The Notes will become part of the same series as the Operating Partnership’s outstanding 8.875% guaranteed notes due 2029, $400 million of which were originally issued on April 12, 2024, for all purposes. The sale of the Notes is expected to close on June 27, 2025, subject to customary closing conditions.

The net proceeds from the offering, after deducting underwriting discounts and estimated transaction expenses related to this offering, are expected to be approximately $148 million. The Operating Partnership intends to use the net proceeds from the offering to repay outstanding borrowings under the Operating Partnership’s $600 million unsecured revolving credit facility, to fund a partial repayment of its secured debt and for general corporate purposes, which may include the repayment, repurchase or other retirement of other indebtedness.

The joint book-running managers for the offering are BofA Securities, Inc., Wells Fargo Securities, LLC, PNC Capital Markets LLC, BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc., Truist Securities, Inc. and U.S. Bancorp Investments, Inc. The senior co-managers for the offering are Citizens JMP Securities, LLC and M&T Securities, Inc. The co-managers for the offering are Samuel A. Ramirez & Company, Inc. and Synovus Securities, Inc.

This offering is being made pursuant to an effective shelf registration statement and related prospectus and preliminary prospectus supplement filed by the Company with the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Copies of the prospectus supplement and prospectus relating to the offering may be obtained from BofA Securities, Attn: Prospectus Department, NC1-004-03-43, 200 North College Street, 3^rd Floor, Charlotte, NC 28255-0001 or by email at dg.prospectus_requests@bofa.com or by calling toll-free 1-800-294-1322; and Wells Fargo Securities, LLC, Attn: Leveraged Debt Capital Markets, 550 S. Tryon Street, 5^th Floor, Charlotte, NC 28202 or by email at IBCMDCMLSHYLeveragedDebtCapitalMarkets@wellsfargo.com or by calling 704-410-4885.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 125 properties and 19.4 million square feet as of March 31, 2025. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements of each of the Company and the Operating Partnership to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” or the negative of these words, or other similar words or terms. Factors which could materially and adversely affect us include, but are not limited to the following: adverse changes in national and local economic conditions, the real estate industry and the commercial real estate markets in which we operate, which would have a negative effect on, among other things: overall market occupancy levels and demand for office and other commercial space and rental rates; the financial condition of our tenants, many of which are financial, legal and other professional firms, our lenders, counterparties to our derivative financial instruments and institutions that hold our cash balances and short-term investments, which may expose us to increased risks of default by these parties; the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue acquisition and development opportunities and refinance existing debt; real estate asset valuations, a decline in which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis and may result in additional impairments of our real estate; competition from other owners, developers and investors, including for tenants and investment opportunities; our failure to lease unoccupied space in accordance with our projections, including on account of changing work patterns and reduced demand for our real estate; our failure to re-lease occupied space upon expiration of leases, including on account of changing work patterns and reduced demand for office space; tenant defaults and the bankruptcy of major tenants; volatility in the capital and credit markets, including changes that reduce the availability, and increase costs, of capital; increasing interest rates, which could increase our borrowing costs and adversely affect the market price of our securities; failure to obtain financing at budgeted levels for developments and redevelopments; failure of interest rate hedging contracts to perform as expected and the effectiveness of such arrangements; inflation, which, among other things, would increase our operating expenses and costs for supplies and labor; failure of acquisitions, developments and other investments, including projects undertaken through joint ventures and equity investments in third parties, to perform as expected; unanticipated costs associated with the purchase, integration and operation of our acquisitions; unanticipated costs and delays to complete, lease-up and operate our developments and redevelopments, including on account of shortages of, and delays in shipping of, supplies and materials for our developments and redevelopments; additional impairment charges; unanticipated costs associated with land development, including building and construction moratoriums and inability to obtain necessary zoning, land-use, building, occupancy and other required governmental approvals, construction cost increases or overruns and construction delays; lack of liquidity of our real estate investments, which could make it difficult for us to respond to changing economic or financial conditions or changes in the operating performance of our properties; potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs to us; the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and the actions taken by government authorities and others related thereto, including actions that restrict or limit the ability of our Company, our properties and our tenants to operate; uninsured losses due to insurance deductibles, self-insurance retention, uninsured claims or casualties, or losses in excess of applicable coverage; increased costs for, or lack of availability of, adequate insurance, including for terrorist acts or environmental liabilities; actual or threatened terrorist attacks; security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems, which support our operations and our properties; the impact on workplace and tenant space demands driven by technology, employee culture and commuting patterns; demand for tenant services beyond those traditionally provided by landlords; liability and clean-up costs under environmental or other laws; risks associated with our investments in real estate ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our venture partners’ financial condition; inability of real estate venture partners to fund venture obligations or perform under our real estate venture development agreements; failure to manage our growth effectively into new product types within our portfolio and real estate venture arrangements; failure of dispositions to close in a timely manner; the impact of climate change and compliance costs relating to laws and regulations governing climate change; risks associated with federal, state and local tax audits; complex regulations relating to our status as a real estate investment trust, or REIT, and the adverse consequences of our failure to qualify as a REIT; changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on our earnings; and our internal control over financial reporting may not be considered effective which could result in a loss of investor confidence in our financial reports, and in turn could have an adverse effect on the market price of our securities. Additional information on factors which could impact us, and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2024. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Company / Investor Contact:
Tom Wirth
EVP & CFO
610-832-7434
tom.wirth@bdnreit.com

FAQ

What is the size and interest rate of Brandywine Realty Trust's (BDN) new notes offering?

Brandywine Realty Trust is offering $150 million of 8.875% guaranteed notes due 2029, priced at 106.000% of principal amount with a re-offer yield of 7.039%.

How will BDN use the proceeds from its 2029 notes offering?

The net proceeds of approximately $148 million will be used to repay borrowings under their $600 million revolving credit facility, fund partial repayment of secured debt, and for general corporate purposes including debt retirement.

When will Brandywine Realty Trust's (BDN) new notes mature?

The notes will mature in 2029 and are part of an existing series of 8.875% guaranteed notes, of which $400 million were originally issued in April 2024.

What is the interest payment schedule for BDN's 2029 notes?

Interest on the notes will be paid semi-annually on April 12 and October 12, with the first payment beginning October 12, 2025.

When is the closing date for Brandywine Realty Trust's (BDN) notes offering?

The notes offering is expected to close on June 27, 2025, subject to customary closing conditions.