Realty Income Announces Proposed Convertible Senior Notes Offering

Rhea-AI Summary

Realty Income (NYSE: O) announced a proposed private offering of $750 million aggregate principal amount of convertible senior notes due January 15, 2029, with an initial purchasers' option for up to $112.5 million additional notes. The notes will be senior, unsecured, pay interest semi‑annually, and may be converted for cash and, if applicable, shares of common stock under specified conditions.

Realty Income expects to use most net proceeds for general corporate purposes, including repaying or repurchasing outstanding debt (notably the $500.0 million 5.050% senior notes due January 13, 2026), hedging, property development and acquisitions, and concurrent repurchases of common stock.

Positive

• Raises up to $862.5 million including initial purchasers' option
• Proceeds earmarked to repay $500.0 million notes due Jan 13, 2026
• Allows concurrent share repurchases to manage capital structure

Negative

• Creates additional senior unsecured convertible debt maturing 2029
• Conversion features may cause share dilution if conversions settled partly with stock
• Concurrent repurchases could raise share price and increase conversion cost

News Market Reaction

-0.74%

1 alert

-0.74% News Effect

On the day this news was published, O declined 0.74%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Convertible notes size: $750 million Over-allotment option: $112.5 million Existing notes: $500.0 million +5 more

8 metrics

Convertible notes size $750 million Aggregate principal amount of convertible senior notes due 2029

Over-allotment option $112.5 million Additional principal amount of notes for initial purchasers

Existing notes $500.0 million Outstanding 5.050% senior notes due 2026 referenced for potential repayment

Existing coupon 5.050% Interest rate on senior notes due 2026

Notes maturity January 15, 2029 Maturity date of proposed convertible senior notes

Option period 13 days Period for initial purchasers’ option to buy additional notes

Property count over 15,500 properties Portfolio size as of September 30, 2025

Dividend increases 133 increases Number of dividend increases since NYSE listing in 1994

Market Reality Check

Price: $61.16 Vol: Volume 6,173,834 is close...

normal vol

$61.16 Last Close

Volume Volume 6,173,834 is close to 20-day average of 6,430,480 (relative volume 0.96). normal

Technical Price 57.31 is trading slightly below the 200-day MA of 57.53.

Peers on Argus

O gained 1.67% while key retail REIT peers were mixed to slightly negative (e.g....

O gained 1.67% while key retail REIT peers were mixed to slightly negative (e.g., SPG -0.27%, KIM -0.84%, REG -1.03%), indicating a stock-specific response to the convertible notes news rather than a broad sector move.

Historical Context

3 past events · Latest: Dec 09 (Positive)

Pattern 3 events

Date	Event	Sentiment	Move	Catalyst
Dec 09	Dividend increase	Positive	-0.7%	Announced small monthly dividend increase and highlighted long dividend track record.
Dec 01	Preferred equity deal	Positive	+0.1%	Announced $800M preferred equity investment in CityCenter and higher 2025 investment outlook.
Nov 18	Term loan financing	Positive	-1.1%	Closed £900M term loan to refinance existing debt and fix rates via swaps.

Pattern Detected

Recent Realty Income news has often seen muted or contrary price reactions, with some positive corporate updates followed by modest declines.

Recent Company History

Over the last few months, Realty Income has focused on balance sheet and portfolio actions. A Dec 9, 2025 dividend increase marked its 133rd since 1994 but coincided with a -0.67% move. On Dec 1, 2025, the company announced an $800 million preferred equity investment in CityCenter and slightly positive price action. A £900 million term loan update on Nov 18, 2025 preceded a -1.1% move. Today’s proposed convertible notes fit this ongoing capital-raising and refinancing pattern.

Market Pulse Summary

This announcement details a proposed $750 million convertible senior notes due 2029 offering, with a...

Analysis

This announcement details a proposed $750 million convertible senior notes due 2029 offering, with an additional $112.5 million option for purchasers. Proceeds may address the $500.0 million 5.050% notes due 2026, other debt, and growth investments, alongside concurrent share repurchases. In context of recent term loan refinancing and preferred equity investments, investors may watch the final interest rate, conversion terms, and how the deal affects leverage, funding costs, and long-term dividend capacity.

Key Terms

convertible senior notes, qualified institutional buyers, rule 144a, real estate investment trust, +1 more

5 terms

convertible senior notes financial

"announced its intention to offer... $750 million aggregate principal amount of convertible senior notes due 2029"

Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.

qualified institutional buyers financial

"in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A"

Qualified institutional buyers are large organizations, like big investment firms or banks, that are allowed to buy certain types of investment opportunities not available to everyday investors. Their size and experience matter because it ensures they understand and can handle complex financial deals, making markets more efficient and secure.

rule 144a regulatory

"qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933"

Rule 144A is a regulation that makes it easier for companies to sell private bonds to large investors without going through all the usual rules that apply to public sales. It matters because it helps companies raise money more quickly and privately, often attracting big investors looking for special deals.

real estate investment trust financial

"necessary to preserve its status as a real estate investment trust for U.S. federal income tax purposes"

A real estate investment trust (REIT) is a company that owns and manages income-producing properties—like apartment buildings, shopping centers, offices, or warehouses—and is required to pass most of its rental income to shareholders as dividends. Think of it as a shared property owner: instead of buying a whole building, investors buy a slice of a portfolio that pays regular income and can offer exposure to property values and rental markets without direct management. REITs matter to investors for predictable income, diversification, and liquidity compared with owning physical real estate.

fundamental change financial

"If certain corporate events that constitute a "fundamental change" occur, which includes certain business combination"

A fundamental change is a major shift in how a company or economy operates, like a new technology or a big change in leadership. It matters because such changes can affect the value or stability of investments, making them more or less attractive. Think of it like a major upgrade or shift in the rules of a game that can change the outcome.

AI-generated analysis. Not financial advice.

SAN DIEGO, Jan. 5, 2026 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced its intention to offer, subject to market and other conditions, $750 million aggregate principal amount of convertible senior notes due 2029 (the "notes") in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Realty Income also expects to grant the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date the notes are first issued, up to an additional $112.5 million aggregate principal amount of notes.

The notes will be senior, unsecured obligations of Realty Income, will accrue interest payable semi-annually in arrears and will mature on January 15, 2029, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Realty Income will settle conversions by paying cash and if applicable, delivering shares of its common stock, based on the applicable conversion rate.

Realty Income will have the right to redeem the notes, in whole or in part, at Realty Income's option at any time prior to maturity to the extent, and only to the extent, necessary to preserve its status as a real estate investment trust for U.S. federal income tax purposes. The redemption price for any note called for redemption will be a cash amount equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The notes will not otherwise be redeemable at Realty Income's election before maturity.

If certain corporate events that constitute a "fundamental change" occur, which includes certain business combination transactions involving Realty Income and certain de-listing events with respect to Realty Income's common stock, then, subject to a limited exception, noteholders may require Realty Income to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.

Use of Proceeds

Realty Income intends to use the majority of net proceeds from this offering for general corporate purposes, which may include, among other things, the repayment or repurchase of Realty Income's indebtedness (including the $500.0 million of outstanding 5.050% senior notes due 2026, which mature on January 13, 2026 and/or borrowings under Realty Income's revolving credit facilities and commercial paper programs), foreign currency swaps or other hedging instruments, the development, redevelopment and acquisition of additional properties, acquisition or business combination transactions, and the expansion and improvement of certain properties in Realty Income's portfolio. Realty Income expects to use a portion of the net proceeds from this offering to repurchase shares of Realty Income's common stock concurrently with the pricing of this offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as Realty Income's agent. The concurrent repurchases of shares of Realty Income's common stock described above may result in Realty Income's common stock trading at prices that are higher than would be the case in the absence of these repurchases, which may result in a higher initial conversion price for the notes Realty Income is offering.

The offer and sale of the notes and any shares of common stock issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.

About Realty Income

Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies^®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of September 30, 2025, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and seven other countries in Europe. We are known as "The Monthly Dividend Company^®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our listing on the NYSE in 1994, we have had 133 dividend increases and are a member of the S&P 500 Dividend Aristocrats^® index for having increased our dividend for over 30 consecutive years.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the anticipated terms of the notes being offered, the completion, timing and size of the proposed offering and the intended use of the net proceeds. Forward-looking statements represent Realty Income's current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Realty Income's common stock and risks relating to Realty Income's business, including those described in periodic reports that Realty Income files from time to time with the SEC. Realty Income may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Realty Income does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.

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SOURCE Realty Income Corporation

FAQ

How much is Realty Income (O) proposing to raise with the convertible notes offering on January 5, 2026?

Realty Income is proposing $750 million of convertible senior notes, with an initial purchasers' option for up to $112.5 million additional notes.

When do the proposed Realty Income (O) convertible notes mature and how is interest paid?

The notes mature on January 15, 2029 and will accrue interest payable semi‑annually in arrears.

What will Realty Income (O) use the net proceeds from the January 5, 2026 offering for?

Majority for general corporate purposes, including repaying or repurchasing debt (notably the $500.0 million notes due Jan 13, 2026), hedging, property development and acquisitions, and share repurchases.

Will the proposed convertible notes from Realty Income (O) dilute existing shareholders?

Conversion features allow settlement in cash and, if applicable, shares of common stock, which may result in dilution if shares are issued on conversion.

Can Realty Income (O) redeem the convertible notes before maturity?

Realty Income may redeem notes prior to maturity only to the extent necessary to preserve its REIT tax status; otherwise the notes are not redeemable at the company's election before maturity.