Phillips Edison & Company Announces Pricing of Offering of $350 Million Aggregate Principal Amount of 5.250% Senior Unsecured Notes Due 2032

Rhea-AI Summary

Phillips Edison & Company's operating partnership has priced a public offering of $350 million in senior unsecured notes with a 5.250% interest rate, maturing on August 15, 2032. The notes were priced at 99.832% of principal amount, with settlement expected on June 17, 2025. The company, a major owner of grocery-anchored shopping centers, plans to use the proceeds for general corporate purposes, including debt repayment, property acquisitions, capital expenditures, and working capital. The offering is being managed by multiple financial institutions, including J.P. Morgan, Fifth Third Securities, and Mizuho as joint book-running managers.

Positive

• $350 million notes offering strengthens company's capital structure
• Long-term maturity until 2032 provides financial stability
• Proceeds will help repay existing debt and fund property acquisitions
• Strong syndicate of reputable financial institutions backing the offering

Negative

• 5.250% interest rate represents a significant cost of capital
• Additional debt could increase the company's leverage and financial risk
• Slight discount pricing at 99.832% of principal amount

Insights

Financial Analyst

PECO's $350M debt offering strengthens its balance sheet, extends maturities, and provides flexibility for growth opportunities at a reasonable 5.25% rate.

Phillips Edison & Company has priced a $350 million offering of senior unsecured notes at 5.250% interest, maturing in August 2032. The notes were priced at 99.832% of principal value, with settlement expected on June 17, 2025. This transaction represents a significant capital structure development for this grocery-anchored shopping center REIT.

The company plans to allocate proceeds toward multiple strategic priorities, including refinancing existing debt (revolving credit facility and term loans) and potential property acquisitions. This approach suggests a two-pronged strategy: first, optimizing the debt profile by potentially extending maturities through this 7-year fixed-rate offering; second, maintaining flexibility for growth through acquisitions and property improvements.

The pricing achieved is particularly noteworthy within the current interest rate environment. For a retail-focused REIT, securing 5.250% seven-year financing demonstrates solid market confidence in PECO's credit quality and business model centered on necessity-based retail. The slight discount to par is a standard pricing mechanism that effectively fine-tunes the yield for investors.

The breadth of the underwriting syndicate is impressive, with twelve financial institutions participating as joint book-running managers, indicating strong institutional support. This successful debt raise strengthens PECO's financial position by providing extended debt tenor and capital flexibility, potentially enabling the company to opportunistically pursue growth initiatives while managing its debt obligations.

CINCINNATI, June 13, 2025 (GLOBE NEWSWIRE) -- Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers, today announced that its operating partnership, Phillips Edison Grocery Center Operating Partnership I, L.P. (the “Operating Partnership”), has priced a public offering of $350 million aggregate principal amount of 5.250% senior unsecured notes due 2032 (the “Notes”). The Notes were priced at 99.832% of the principal amount and will mature on August 15, 2032. The offering is expected to settle on June 17, 2025, subject to the satisfaction of customary closing conditions. The notes will be fully and unconditionally guaranteed by PECO.

The Operating Partnership intends to use the net proceeds from the offering for general corporate purposes, including to repay borrowings under its revolving credit facility, to repay its term loans and other outstanding indebtedness, to acquire additional properties, for capital expenditures, expansion and working capital, to redevelop and/or improve properties and for other general corporate purposes. Pending application of the net proceeds from the offering for the foregoing purposes, such proceeds may initially be invested in short-term securities.

J.P. Morgan, Fifth Third Securities, Mizuho, Morgan Stanley, US Bancorp, BofA Securities, BMO Capital Markets, Capital One Securities, KeyBanc Capital Markets, PNC Capital Markets LLC, Regions Securities LLC and Wells Fargo Securities acted as joint book-running managers of the offering. Ramirez and Co., Inc. acted as co-manager of the offering.

The notes are being offered pursuant to an effective shelf registration statement filed by PECO and the Operating Partnership with the Securities and Exchange Commission (“SEC”). The offering will be made only by means of the prospectus supplement and accompanying prospectus. The preliminary prospectus supplement and accompanying prospectus related to the offering have been filed with the SEC and are available on the SEC’s website at http://www.sec.gov. A copy of the final prospectus supplement and accompanying prospectus related to the offering may be obtained, when available, by contacting: J.P. Morgan Securities LLC, 383 Madison Avenue, New York, NY 10179, Tel: (212) 834-4533; Fifth Third Securities, Inc., 38 Fountain Square Plaza, Cincinnati, Ohio 45263, Attn: Syndicate Department, 1-866-531-5353; Mizuho Securities USA LLC, Toll free: 1-866-271-7403; Morgan Stanley & Co. LLC, Toll free: 1-866-718-1649; or U.S. Bancorp Investments, Inc., Toll free: 1-877-558-2607.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Phillips Edison & Company

Phillips Edison & Company, Inc. (“PECO”) is one of the nation’s largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO’s centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO’s top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of March 31, 2025, PECO managed 321 shopping centers, including 298 wholly-owned centers comprising 33.5 million square feet across 31 states and shopping centers owned in three institutional joint ventures. PECO is focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.

Forward-Looking Statements

This press release contains certain 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. Phillips Edison & Company, Inc. (the “Company”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements can generally be identified by the Company’s use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements include, but are not limited to: (a) statements about the Company’s plans, strategies, initiatives, and prospects, including the use of the proceeds from the offering; (b) statements about the Company’s underwritten incremental yields; and (c) statements about the Company’s future results of operations, capital expenditures, and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: (i) the risk that the offering may not be completed on the proposed terms or at all; (ii) changes in national, regional, or local economic climates; (iii) local market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in the Company’s portfolio; (iv) vacancies, changes in market rental rates, and the need to periodically repair, renovate, and re-let space; (v) competition from other available shopping centers and the attractiveness of properties in the Company’s portfolio to its tenants; (vi) the financial stability of the Company’s tenants, including, without limitation, their ability to pay rent; (vii) the Company’s ability to pay down, refinance, restructure, or extend its indebtedness as it becomes due; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (ix) potential liability for environmental matters; (x) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xi) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax, and other considerations; (xii) changes in tax, real estate, environmental, and zoning laws; (xiii) information technology security breaches; (xiv) the Company’s corporate responsibility initiatives; (xv) loss of key executives; (xvi) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; (xvii) the economic, political, and social impact of, and uncertainty relating to, pandemics or other health crises; (xviii) the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (xix) the loss or bankruptcy of the Company’s tenants; (xx) to the extent the Company is seeking to dispose of properties, the Company’s ability to do so at attractive prices or at all; and (xxi) the impact of tariffs and global trade disruptions on the Company, its tenants, and consumers, including the impact on inflation, supply chains, and consumer sentiment. Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 11, 2025, as updated from time to time in the Company’s periodic and/or current reports filed with the SEC, which are accessible on the SEC’s website at www.sec.gov. Therefore, such statements are not intended to be a guarantee of the Company’s performance in future periods. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Investors
Kimberly Green, Head of Investor Relations
(513) 692-3399, kgreen@phillipsedison.com

FAQ

What is the size and interest rate of PECO's new notes offering?

PECO's offering consists of $350 million aggregate principal amount of senior unsecured notes with a 5.250% interest rate.

When will PECO's new notes mature?

The notes will mature on August 15, 2032.

How does PECO plan to use the proceeds from the notes offering?

PECO plans to use the proceeds for general corporate purposes, including debt repayment, property acquisitions, capital expenditures, working capital, and property improvements.

Who are the main underwriters for PECO's notes offering?

The main joint book-running managers include J.P. Morgan, Fifth Third Securities, Mizuho, Morgan Stanley, US Bancorp, and several other major financial institutions.

What is the pricing of PECO's notes offering?

The notes were priced at 99.832% of the principal amount.