Realty Income Prices €1.3 Billion Dual-Tranche Offering of Euro-Denominated Senior Unsecured Notes

Rhea-AI Summary

Realty Income (NYSE: O) has priced a dual-tranche offering of Euro-denominated senior unsecured notes totaling €1.3 billion. The offering consists of €650 million of 3.375% notes due 2031 at 99.568% of principal (3.456% yield) and €650 million of 3.875% notes due 2035 at 99.552% of principal (3.930% yield). The notes have a combined weighted average tenor of 8.0 years and a weighted average yield of 3.693%. Proceeds will be used for general corporate purposes, including debt repayment, property development, acquisitions, and portfolio improvements. The offering is expected to close on June 20, 2025. Realty Income, an S&P 500 Dividend Aristocrat, owns over 15,600 properties across the US, UK, and six European countries, and has declared 660 consecutive monthly dividends.

Positive

• Large-scale €1.3 billion debt offering demonstrates strong market access and investor confidence
• Reasonable weighted average yield of 3.693% in current rate environment
• Proceeds provide flexibility for various growth initiatives and debt management
• Strong company profile with 660 consecutive monthly dividends and S&P 500 Dividend Aristocrat status

Negative

• Additional debt increases company's leverage and interest expense obligations
• Exposure to currency risk with Euro-denominated debt
• Higher interest rates compared to historical levels impact borrowing costs

Insights

Corporate Finance Specialist

Realty Income secured €1.3B in new debt at reasonable rates, improving financial flexibility while managing its debt maturity profile.

Realty Income's €1.3 billion Euro-denominated debt offering represents a significant capital raise that enhances the REIT's financial flexibility. The dual-tranche structure with €650 million at 3.375% due 2031 and €650 million at 3.875% due 2035 results in a weighted average maturity of 8 years and yield of 3.693%.

These rates appear reasonable in the current European interest rate environment, especially for a company with Realty Income's credit profile. The company is strategically accessing the Euro debt markets rather than USD markets, likely to better match its European property portfolio and potentially hedge against currency risk in its European operations.

The unspecified use of proceeds gives management considerable flexibility, though debt repayment appears to be a priority. This transaction allows Realty Income to potentially refinance higher-cost debt, extend its maturity profile, and fund its growth pipeline without immediately diluting shareholders through equity issuance.

With over 15,600 properties globally and its status as an S&P 500 Dividend Aristocrat with 660 consecutive monthly dividends, Realty Income's ability to access debt markets on these terms demonstrates continued market confidence in its business model. This financing enhances the company's ability to maintain its acquisition strategy and dividend growth trajectory while prudently managing its capital structure.

SAN DIEGO, June 11, 2025 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced the pricing of a public offering of €650 million of 3.375% senior unsecured notes due June 20, 2031 (the "2031 notes"), and €650 million of 3.875% senior unsecured notes due June 20, 2035 (the "2035 notes"). The public offering price for the 2031 Notes was 99.568% of the principal amount for an effective annual yield to maturity of 3.456%, and the public offering price for the 2035 Notes was 99.552% of the principal amount for an effective annual yield to maturity of 3.930%. Combined, the notes have a weighted average tenor of approximately 8.0 years and a weighted average annual yield to maturity of 3.693%.

The net proceeds from this offering will be used for general corporate purposes, which may include, among other things, the repayment or repurchase of our indebtedness, including borrowings under our 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 our portfolio.

This offering is expected to close on June 20, 2025, subject to the satisfaction of customary closing conditions.

The active joint book-running managers for the offering are BNP PARIBAS, BBVA, Citigroup, RBC Capital Markets, and Wells Fargo Securities.

A copy of the prospectus supplement and prospectus, when available, related to this offering may be obtained by contacting:
BNP PARIBAS by telephone at +44 (0)20-7595-8222, Banco Bilbao Vizcaya Argentaria, S.A. by telephone at 1-800-422-8692, Citigroup Global Markets Limited by telephone at 1-800-831-9146, RBC Europe Limited by telephone at +44 (0) 20 7029 7031 and Wells Fargo Securities International Limited by telephone at 1-800-645-3751.

These securities are offered pursuant to a Registration Statement that has become effective under the Securities Act of 1933, as amended. These securities are only offered by means of the prospectus included in the Registration Statement and the prospectus supplement related to the offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer or sale of these securities in any state or other jurisdiction where, or to any person to whom, the offer, solicitation, or sale of these securities would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

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 invest in diversified commercial real estate and, as of March 31, 2025, have a portfolio of over 15,600 properties in all 50 U.S. states, the U.K., and six 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 founding, we have declared 660 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats^® index for having increased our dividend for the last 30 consecutive years.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio and are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms and partners of such funding); continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to income tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which may transfer or limit our control of the underlying investments; epidemics or pandemics, including measures taken to limit their spread, the impacts on us, our business, our clients, and the economy generally; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers and acquisitions; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and results may differ materially from what is expressed or forecasted and expectations and forecasts made in the forward-looking statements may not materialize. We do not undertake any obligation to update forward-looking statements or to publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made or to reflect the occurrence of unanticipated events.

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SOURCE Realty Income Corporation

FAQ

What is the size and structure of Realty Income's (NYSE: O) new Euro note offering?

Realty Income's offering totals €1.3 billion, split between €650 million of 3.375% notes due 2031 and €650 million of 3.875% notes due 2035.

What is the yield on Realty Income's (O) 2025 Euro notes?

The 2031 notes yield 3.456% and the 2035 notes yield 3.930%, with a weighted average yield of 3.693%.

How will Realty Income (O) use the proceeds from the Euro note offering?

Proceeds will be used for general corporate purposes, including debt repayment, property development, acquisitions, portfolio improvements, and business combinations.

What is Realty Income's (NYSE: O) current property portfolio size?

As of March 31, 2025, Realty Income owns over 15,600 properties across the US, UK, and six other European countries.

How many consecutive monthly dividends has Realty Income (O) paid?

Realty Income has declared 660 consecutive monthly dividends and has increased its dividend for 30 consecutive years as an S&P 500 Dividend Aristocrat.