Realty Income Prices $750.0 Million Convertible Senior Notes Offering

Rhea-AI Summary

Realty Income (NYSE: O) priced a private offering of $750.0 million aggregate principal amount of 3.500% convertible senior notes due 2029, with settlement scheduled for January 8, 2026 and an initial purchasers' option for an additional $112.5 million.

The notes carry an initial conversion rate of 14.4051 shares per $1,000 principal (≈ $69.42 conversion price, ~20% premium to the $57.85 share price on January 5, 2026). Estimated net proceeds are ≈ $735.0 million (≈ $845.5 million if option exercised).

Realty Income intends to use proceeds for general corporate purposes, including repayment of debt, hedging, property investment, and concurrent repurchase of ≈ 1.8 million shares for ≈ $102.1 million.

Positive

• Net proceeds estimated at ≈ $735.0 million
• Concurrent $102.1 million share repurchase (~1.8 million shares)
• Initial conversion price set at ≈ $69.42 (20% premium)

Negative

• New convertible notes add $750.0 million senior unsecured debt
• Outstanding 5.050% senior notes of $500.0 million mature Jan 13, 2026

Key Figures

Convertible notes size $750.0 million Aggregate principal amount of 3.500% convertible senior notes due 2029

Overallotment option $112.5 million Additional principal amount available to initial purchasers

Coupon rate 3.500% per annum Interest on convertible senior notes, paid semi-annually

Initial conversion price $69.42 per share Based on conversion rate of 14.4051 shares per $1,000 principal

Conversion premium 20% Premium over last sale price of $57.85 on January 5, 2026

Estimated net proceeds $735.0 million Net of fees; $845.5M if option fully exercised

Debt targeted for repayment $500.0 million Outstanding 5.050% senior notes due January 13, 2026

Share repurchase 1.8 million shares / $102.1 million Common stock repurchased concurrently with pricing of the offering

Market Reality Check

$57.42 Last Close

Volume Volume 6,756,149 vs 20-day average 6,467,426 (about 4% higher), suggesting slightly elevated trading ahead of the offering. normal

Technical Price $57.85 is just above the $57.53 200-day MA and about 5.3% below the $61.09 52-week high, while sitting 14.08% above the $50.71 52-week low.

Peers on Argus

Peers in the retail REIT space showed mixed, mostly modest moves, with SPG up 0.03%, KIM up 0.4%, REG up 1.46%, ADC down 0.07%, and NNN up 0.78%. This pattern suggests the reaction around Realty Income’s convertible notes was more stock-specific than sector-driven.

Historical Context

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	Investment transaction	Positive	+0.1%	$800M perpetual preferred equity investment in CityCenter Las Vegas assets.
Nov 26	Governance dispute	Neutral	+0.7%	Orion rejected dissident director nomination notice as invalid under bylaws.
Nov 19	Activist nominations	Neutral	-1.1%	Orion disclosed receipt of board nominees from Kawa Capital Management.
Nov 18	Term loan financing	Neutral	-1.1%	Closed £900M term loan to refinance Sterling borrowings and fix rates via swaps.

Pattern Detected

Recent Realty Income financing and capital allocation news has often seen muted or mixed next-day price reactions, including divergence on some seemingly positive items like dividend increases and debt refinancings.

Recent Company History

Over the past few months, Realty Income has focused on incremental dividend growth, large-scale investments, and balance sheet management. In December 2025, it announced its 133rd dividend increase and highlighted a portfolio of over 15,500 properties. It also committed to an $800 million preferred equity investment in CityCenter Las Vegas and closed a £900 million term loan to refinance Sterling debt and a $4.0 billion revolver. Today’s convertible notes pricing continues that pattern of using capital markets to fund investments and refinance upcoming maturities.

Market Pulse Summary

This announcement details a $750.0 million 3.500% convertible notes due 2029 with an additional $112.5 million option, adding a new financing layer to Realty Income’s capital structure. Proceeds are earmarked for general corporate purposes, including repaying $500.0 million of 2026 notes and funding growth, alongside a $102.1 million repurchase of about 1.8 million shares. Investors may track how this financing interacts with existing debt maturities, future property investments, and ongoing dividend growth.

Key Terms

convertible senior notes financial

"pricing of its offering of $750.0 million aggregate principal amount of 3.500% 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.

rule 144a regulatory

"a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act"

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 regulatory

"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 a "fundamental change" (as defined in the indenture for the notes) occurs"

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.

qualified institutional buyers regulatory

"in a private offering to persons reasonably believed to be qualified institutional buyers"

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.

AI-generated analysis. Not financial advice.

SAN DIEGO, Jan. 6, 2026 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced the pricing of its offering of $750.0 million aggregate principal amount of 3.500% 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"). The issuance and sale of the notes are scheduled to settle on January 8, 2026, subject to customary closing conditions. Realty Income also granted 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 and will accrue interest at a rate of 3.500% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The notes will mature on January 15, 2029, unless earlier repurchased, redeemed or converted. Before October 15, 2028, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after October 15, 2028, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Realty Income will settle conversions by paying cash and, if applicable, delivering shares of its common stock based on the applicable conversion rate. The initial conversion rate is 14.4051 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $69.42 per share of common stock. The initial conversion price represents a premium of approximately 20% over the last reported sale price of $57.85 per share of Realty Income's common stock on January 5, 2026. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.

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 a "fundamental change" (as defined in the indenture for the notes) occurs, 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.

Use of Proceeds
Realty Income estimates that the net proceeds from the offering will be approximately $735.0 million (or approximately $845.5 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasers' discounts and commissions and Realty Income's estimated offering expenses. 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 approximately $102.1 million of the net proceeds from the offering to repurchase approximately 1.8 million shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as Realty Income's agent.

As described above, Realty Income intends to use a portion of the net proceeds of the offering to repurchase shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions. These repurchases, and any other repurchases of shares of Realty Income's common stock, may increase, or reduce the size of a decrease in, the trading price of Realty Income's common stock, and repurchases executed concurrently with the pricing of the offering may have affected the initial terms of the notes, including the initial conversion price.

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 completion of the offering, the expected amount and 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, the satisfaction of the closing conditions related to the offering 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 offering described in this press release and, if the offering is consummated, cannot provide any assurances regarding 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

What did Realty Income announce about the $750.0 million convertible notes (O) on January 6, 2026?

Realty Income priced $750.0 million of 3.500% convertible senior notes due 2029, settling on January 8, 2026.

What is the initial conversion price and rate for Realty Income's convertible notes (O)?

The initial conversion rate is 14.4051 shares per $1,000 principal, implying an initial conversion price of ≈ $69.42 per share.

How will Realty Income (O) use the net proceeds from the January 2026 convertible offering?

Proceeds will fund general corporate purposes including debt repayment, hedging, property investment, and a concurrent $102.1 million share repurchase.

When can holders convert Realty Income's 3.500% notes (O) due 2029 into common stock?

Noteholders may convert upon certain events before Oct 15, 2028, and at any time from Oct 15, 2028 until two business days before maturity.

What is the effect of the initial purchasers' option in Realty Income's convertible note offering (O)?

Initial purchasers may buy up to an additional $112.5 million of notes within 13 days, raising gross proceeds to ≈ $845.5 million if exercised.