CTO Realty Growth Announces Partial Extinguishment of 3.875% Convertible Senior Notes
Rhea-AI Summary
CTO Realty Growth (NYSE: CTO) has announced the partial extinguishment of its 3.875% Convertible Senior Notes due April 15, 2025. The company has entered into privately negotiated exchange agreements to convert $35.2 million of the Notes into 1,089,555 newly issued common shares and $29.0 million in cash, including $0.6 million in accrued interest.
Prior to the exchange, the Notes had an aggregate principal amount of $51.0 million, representing approximately 3.8 million underlying shares. Following the transaction, $15.8 million in Notes remain outstanding, scheduled for cash settlement at maturity. CTO estimates the final cash settlement to be around $22 million, though the actual amount will depend on the conversion ratio and volume weighted average stock price during the settlement period.
The exchange was executed under Section 4(a)(2) of the Securities Act of 1933, with Truist Securities and ICR Capital serving as financial advisors. After this transaction, CTO's total outstanding common shares stand at 32,936,967 as of April 3, 2025.
Positive
- Reduction of debt liability from $51.0M to $15.8M through partial note extinguishment
- Strategic debt restructuring ahead of April 2025 maturity
- Demonstrates financial flexibility in managing debt obligations
Negative
- Significant cash outlay of $29.0M required for the exchange
- Dilution of existing shareholders through issuance of 1,089,555 new shares
- Additional $22M cash payment estimated for remaining notes at maturity
News Market Reaction
On the day this news was published, CTO declined 3.97%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
WINTER PARK, Fla., April 03, 2025 (GLOBE NEWSWIRE) -- CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) announced today that the Company entered into privately negotiated exchange agreements with certain holders of its
In accordance with the terms of the exchange agreements, the Company exchanged
After the closing of these exchange agreements,
The exchanges are being made pursuant to an exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended. This press release does not constitute an offer to exchange the Notes for common stock or other securities of the Company.
Truist Securities and ICR Capital LLC acted as the Company’s financial advisors.
About CTO Realty Growth, Inc.
CTO Realty Growth, Inc. owns and operates high-quality, open-air shopping centers located in the higher growth Southeast and Southwest markets of the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE).
We encourage you to review our most recent investor presentation and supplemental financial information, which is available on our website at www.ctoreit.com.
Safe Harbor
Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words. Examples of forward-looking statements in this press release include, without limitation, statements regarding the Company’s estimate of the cash settlement amount for the remaining principal amount of the Notes.
Although forward-looking statements are made based upon management’s present expectations and beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include, but are not limited to: the Company’s ability to remain qualified as a REIT; the Company’s exposure to U.S. federal and state income tax law changes, including changes to the REIT requirements; general adverse economic and real estate conditions; macroeconomic and geopolitical factors, including but not limited to inflationary pressures, interest rate volatility, tariffs, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; the ultimate geographic spread, severity and duration of pandemics, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business; the loss or failure, or decline in the business or assets of PINE; the completion of 1031 exchange transactions; the availability of investment properties that meet the Company’s investment goals and criteria; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and other risks and uncertainties discussed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission.
There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
Contact:
Investor Relations
ir@ctoreit.com
FAQ
What is the remaining principal amount of CTO's convertible notes after the partial extinguishment?
How many new common shares did CTO issue in the notes exchange?
What is the estimated cash settlement for CTO's remaining convertible notes?
How much cash did CTO pay in the convertible notes exchange?
What is CTO's total number of outstanding shares after the notes exchange?
