Healthcare Realty (NYSE: HR) prices $600M 3% exchangeable notes due 2032
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Healthcare Realty Trust Incorporated is raising new debt through its operating partnership, which has priced a private offering of $600 million aggregate principal amount of 3.00% exchangeable senior notes due 2032, upsized from a previously announced $500 million. The notes are senior, unsecured obligations of Healthcare Realty Holdings, L.P. and are fully and unconditionally guaranteed by Healthcare Realty.
Noteholders can exchange the notes for cash and, if applicable, shares of class A common stock at an initial exchange rate of 43.4660 shares per $1,000 of notes, implying an exchange price of about $23.01 per share, a 17.5% premium to the $19.58 share price on May 4, 2026. A capped call with an initial cap price of about $27.41 per share (a 40.0% premium) is intended to reduce potential dilution.
Healthcare Realty L.P. expects net proceeds of about $582.6 million (or $680.1 million if the underwriters’ option is fully exercised). It plans to spend $24.0 million on capped call transactions, about $75.0 million to repurchase approximately 3.83 million shares of class A common stock, and use the remainder, together with borrowings under its unsecured revolving credit facility, to repay its 3.500% Senior Notes due 2026.
Positive
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Negative
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Insights
Healthcare Realty refinances 2026 debt with a larger 2032 exchangeable notes deal.
Healthcare Realty is issuing $600 million of 3.00% exchangeable senior notes due 2032, upsized from $500 million. The notes are senior, unsecured obligations of its operating partnership and are guaranteed by the REIT. An extra $100 million overallotment option adds flexibility for further issuance.
The company estimates net proceeds of $582.6 million, or $680.1 million if the option is fully exercised. It plans to allocate $24.0 million to capped call transactions, about $75.0 million to repurchase roughly 3.83 million shares, and use the balance, along with revolving credit borrowings, to repay 3.500% Senior Notes due 2026. This shifts part of its debt maturity profile out to 2032 at a lower coupon.
The initial exchange price of about $23.01 per share represents a 17.5% premium to the $19.58 stock price on May 4, 2026, with capped calls set at about $27.41 per share, a 40.0% premium. These terms limit near-term dilution while still allowing equity-linked features. Overall, the transaction is a notable capital structure move but its ultimate impact depends on future stock performance and exchange behavior.
8-K Event Classification
2 items: 8.01, 9.01
2 items
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Notes principal amount: $600,000,000
Overallotment option: $100,000,000
Coupon rate: 3.00% per annum
+5 more
8 metrics
Notes principal amount
$600,000,000
Aggregate principal amount of 3.00% exchangeable senior notes due 2032
Overallotment option
$100,000,000
Additional notes available to initial purchasers within 13 days
Coupon rate
3.00% per annum
Interest on exchangeable senior notes, payable semi-annually
Initial exchange rate
43.4660 shares per $1,000
Implied exchange into class A common stock
Initial exchange price
$23.01 per share
17.5% premium to $19.58 HR share price on May 4, 2026
Net proceeds estimate
$582.6 million
Expected net proceeds, excluding any exercise of overallotment
Share repurchase amount
$75.0 million
To repurchase approximately 3.83 million HR shares at pricing
Capped call cap price
$27.41 per share
Approximate initial cap, a 40.0% premium to $19.58
Key Terms
exchangeable senior notes, capped call transactions, qualified institutional buyers, fundamental change, +2 more
6 terms
exchangeable senior notes financial
"proposed private offering of Exchangeable Senior Notes due 2032 (the “Notes”)"
Exchangeable senior notes are loans a company issues that promise regular interest payments and have priority over other debts, but can be swapped by the holder for shares of a different company. Think of it as lending money with an option to trade the loan for someone else’s stock; investors weigh the steady income and higher repayment priority against the chance of receiving shares that dilute ownership or fluctuate in value. These features affect a company’s credit risk, potential dilution, and appeal to different investors.
capped call transactions financial
"net proceeds from the offering to fund the cost of entering into the capped call transactions"
Capped call transactions are agreements where investors buy options that give them the chance to benefit if a stock's price goes up, but with a limit on how much they can gain. This helps protect them from paying too much if the stock's price rises a lot, similar to having a maximum limit on a reward. They matter because they help investors manage risk while still allowing some upside potential.
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.
fundamental change financial
"If certain corporate events that constitute a “fundamental change” occur"
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.
registration rights agreement regulatory
"will be entitled to the benefits of a registration rights agreement"
A registration rights agreement is a contract that gives investors the option to have their ownership stakes officially registered with the government, making it easier to sell their shares later. This agreement matters because it provides investors with a clearer path to cash out their investments if they choose, offering more liquidity and confidence in their ability to sell their holdings when desired.
real estate investment trust financial
"to preserve Healthcare Realty’s 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.
Offering Details
debt offering
Offering
Offering Type
debt offering
Use of Proceeds
Fund capped call transactions, repurchase approximately $75.0 million of shares, and refinance 3.500% Senior Notes due 2026 with remaining proceeds plus revolver borrowings
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2026 (May 4, 2026)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||||||||
| (Address of Principal Executive Office and Zip Code) | (Registrant’s telephone number, including area code) | ||||||||||||||||||||||||||||||||||
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
| Healthcare Realty Trust Incorporated | Emerging growth company | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Healthcare Realty Trust Incorporated | ☐ | ||||||||||
| Item 8.01 | Other Events | ||||
On May 4, 2026, Healthcare Realty Trust Incorporated (the “Company”) issued a press release relating to a proposed private offering of Exchangeable Senior Notes due 2032 (the “Notes”) of its subsidiary, Healthcare Realty Holdings, L.P., to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Offering”). A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
On May 5, 2026, the Company issued a press release relating to the pricing of the Offering of the Notes. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
Neither this Current Report on Form 8-K nor either press release constitutes an offer to sell, or the solicitation of an offer to buy, the Notes or the shares of the Company’s common stock, if any, issuable upon exchange of the Notes.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits.
| 99.1 | Press release of Healthcare Realty Trust Incorporated, dated May 4, 2026. | ||||
| 99.2 | Press release of Healthcare Realty Trust Incorporated, dated May 5, 2026. | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 5, 2026 | Healthcare Realty Trust Incorporated | ||||||||||
| By: | /s/ Daniel Gabbay | ||||||||||
| Name: Daniel Gabbay | |||||||||||
| Title: Executive Vice President and Chief Financial Officer | |||||||||||
News Release
HEALTHCARE REALTY ANNOUNCES PROPOSED EXCHANGEABLE SENIOR NOTES OFFERING
NASHVILLE, Tenn. - (GLOBE NEWSWIRE) - May 4, 2026 - Healthcare Realty Trust Incorporated (NYSE: HR) (“Healthcare Realty”) today announced that its operating partnership, Healthcare Realty Holdings, L.P. (“Healthcare Realty L.P.”), intends to offer, subject to market and other conditions, $500,000,000 aggregate principal amount of exchangeable senior notes due 2032 (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”). Healthcare Realty will fully and unconditionally guarantee the notes on a senior, unsecured basis. Healthcare Realty L.P. 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 $75,000,000 aggregate principal amount of notes.
The notes will be senior, unsecured obligations of Healthcare Realty L.P., will accrue interest payable semi-annually in arrears and will mature on January 15, 2032, unless earlier repurchased, redeemed or exchanged. Noteholders will have the right to exchange their notes in certain circumstances and during specified periods. Healthcare Realty L.P. will settle exchanges in cash and, if applicable, shares of Healthcare Realty’s class A common stock.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Healthcare Realty L.P.’s option at any time, and from time to time, on or after January 22, 2030 and on or before the 30th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Healthcare Realty’s class A common stock exceeds 130% of the exchange price for a specified period of time and certain other conditions are satisfied. In addition, the notes will be redeemable, in whole or in part, at Healthcare Realty L.P.’s option at any time to the extent necessary to preserve Healthcare Realty’s status as a real estate investment trust for U.S. federal income tax purposes. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If certain corporate events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require Healthcare Realty L.P. 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 notes will be entitled to the benefits of a registration rights agreement pursuant to which Healthcare Realty will agree to register, under the Securities Act, the resale of the shares of Healthcare Realty’s class A common stock, if any, issuable upon exchange of the notes within specified time periods and subject to certain limitations.
The interest rate, initial exchange rate and other terms of the notes will be determined at the pricing of the offering.
Healthcare Realty L.P. intends to use (i) a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below; (ii) up to approximately $75.0 million of the net proceeds to repurchase shares of Healthcare Realty’s class A common stock concurrently with the pricing of the offering in privately negotiated transactions through one of the initial purchasers of the offering or its affiliate, as Healthcare Realty L.P.’s agent; and (iii) the remainder of the net proceeds from the offering, together with borrowings from its unsecured revolving credit facility, to repay outstanding
indebtedness under its 3.500% Senior Notes due 2026. If the initial purchasers exercise their option to purchase additional notes, then Healthcare Realty L.P. intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below. Pending such uses, Healthcare Realty L.P. intends to invest the proceeds in a variety of capital preservation investments, including short-term, interest-bearing instruments such as U.S. government securities and municipal bonds, and may apply proceeds to outstanding indebtedness under its revolving credit and term loan agreement.
In connection with the pricing of the notes, Healthcare Realty L.P. and Healthcare Realty expect to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or one or more other financial institutions (the “option counterparties”). The capped call transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Healthcare Realty’s class A common stock that will initially underlie the notes. If the initial purchasers exercise their option to purchase additional notes, then Healthcare Realty L.P. and Healthcare Realty expect to enter into additional capped call transactions with the option counterparties.
The capped call transactions are expected generally to reduce the potential dilution to Healthcare Realty’s class A common stock upon any exchange of the notes and/or offset any potential cash payments Healthcare Realty L.P. is required to make in excess of the principal amount of exchanged notes, as the case may be, upon exchange of the notes. If, however, the market price per share of Healthcare Realty’s class A common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Healthcare Realty’s class A common stock and/or purchase shares of Healthcare Realty’s class A common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Healthcare Realty’s class A common stock or the notes at that time.
In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Healthcare Realty’s class A common stock and/or purchasing or selling Healthcare Realty’s class A common stock or other securities of Healthcare Realty in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so following any fundamental change repurchase, redemption or early exchange of the notes and during any observation period related to an exchange of notes after October 15, 2031, or, to the extent Healthcare Realty L.P. exercises the relevant election under the capped call transactions, following any other repurchase of the notes). This activity could also cause or avoid an increase or decrease in the market price of Healthcare Realty’s class A common stock or the notes, which could affect the ability to exchange the notes, and, to the extent the activity occurs during any observation period related to an exchange of notes, it could affect the number of shares and value of the consideration that noteholders will receive upon exchange of the notes.
The offer and sale of the notes, the guarantee and any shares of Healthcare Realty’s class A common stock issuable upon exchange of the notes have not been 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. Although Healthcare Realty L.P. and Healthcare Realty intend to enter into a registration rights agreement pursuant to which Healthcare Realty will agree to register, under the Securities Act, the resale of the shares of Healthcare Realty’s class A common stock, if any, issuable upon exchange of the notes, the registration rights agreement will contain significant limitations, and a resale registration statement may not be available at the time investors wish to resell the shares of Healthcare Realty’s class A common stock, if any, issuable upon exchange of their notes. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of Healthcare Realty’s class A common stock issuable upon exchange 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 Healthcare Realty
Healthcare Realty Trust Incorporated (NYSE: HR) is the largest public, pure-play owner, operator and developer of medical outpatient buildings in the United States.
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, the intended use of the proceeds and the anticipated terms of, and the effects of entering into, the capped call transactions described above. Forward-looking statements represent Healthcare Realty’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 Healthcare Realty’s class A common stock and risks relating to Healthcare Realty’s business, including those described in periodic reports that Healthcare Realty L.P. files from time to time with the SEC. Healthcare Realty L.P. 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 neither Healthcare Realty nor Healthcare Realty L.P. undertakes to update the statements included in this press release for subsequent developments, except as may be required by law.
Contact Information
Daniel Gabbay
EVP & Chief Financial Officer
InvestorRelations@healthcarerealty.com
News Release
HEALTHCARE REALTY ANNOUNCES PRICING OF UPSIZED $600 MILLION EXCHANGEABLE SENIOR NOTES OFFERING
NASHVILLE, Tenn. - (GLOBAL NEWSWIRE) - May 5, 2026 - Healthcare Realty Trust Incorporated (NYSE: HR) (“Healthcare Realty”) today announced that its operating partnership, Healthcare Realty Holdings, L.P. (“Healthcare Realty L.P.”), priced its offering of $600,000,000 aggregate principal amount of 3.00% exchangeable senior notes due 2032 (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 offering size was increased from the previously announced offering size of $500,000,000 aggregate principal amount of notes. Healthcare Realty will fully and unconditionally guarantee the notes on a senior, unsecured basis. The issuance and sale of the notes are scheduled to settle on May 7, 2026, subject to customary closing conditions. Healthcare Realty L.P. 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 $100,000,000 aggregate principal amount of notes.
The notes will be senior, unsecured obligations of Healthcare Realty L.P. and will accrue interest at a rate of 3.00% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2027. The notes will mature on January 15, 2032, unless earlier repurchased, redeemed or exchanged. Before October 15, 2031, noteholders will have the right to exchange their notes only upon the occurrence of certain events. From and after October 15, 2031, noteholders may exchange their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Healthcare Realty L.P. will settle exchanges in cash and, if applicable, shares of Healthcare Realty’s class A common stock. The initial exchange rate is 43.4660 shares of Healthcare Realty’s class A common stock per $1,000 principal amount of notes, which represents an initial exchange price of approximately $23.01 per share of Healthcare Realty’s class A common stock. The initial exchange price represents a premium of approximately 17.5% over the last reported sale price of $19.58 per share of Healthcare Realty’s class A common stock on May 4, 2026. The exchange rate and exchange price will be subject to adjustment upon the occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Healthcare Realty L.P.’s option at any time, and from time to time, on or after January 22, 2030 and on or before the 30th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Healthcare Realty’s class A common stock exceeds 130% of the exchange price for a specified period of time and certain other conditions are satisfied. In addition, the notes will be redeemable, in whole or in part, at Healthcare Realty L.P.’s option at any time to the extent necessary to preserve Healthcare Realty’s status as a real estate investment trust for U.S. federal income tax purposes. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If a “fundamental change” (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Healthcare Realty L.P. 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 notes will be entitled to the benefits of a registration rights agreement pursuant to which Healthcare Realty will agree to register, under the Securities Act, the resale of the shares of Healthcare Realty’s class
A common stock, if any, issuable upon exchange of the notes within specified time periods and subject to certain limitations.
Healthcare Realty L.P. estimates that the net proceeds from the offering will be approximately $582.6 million (or approximately $680.1 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasers’ discounts and commissions and Healthcare Realty L.P.’s estimated offering expenses. Healthcare Realty L.P. intends to use (i) $24.0 million of the net proceeds to fund the cost of entering into the capped call transactions described below; (ii) approximately $75.0 million of the net proceeds to repurchase approximately 3.83 million shares of Healthcare Realty’s class A common stock concurrently with the pricing of the offering in privately negotiated transactions through one of the initial purchasers of the offering or its affiliate, as Healthcare Realty L.P.’s agent; and (iii) the remainder of the net proceeds from the offering, together with borrowings from its unsecured revolving credit facility, to repay outstanding indebtedness under its 3.500% Senior Notes due 2026. If the initial purchasers exercise their option to purchase additional notes, then Healthcare Realty L.P. intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below. Pending such uses, Healthcare Realty L.P. intends to invest the proceeds in a variety of capital preservation investments, including short-term, interest-bearing instruments such as U.S. government securities and municipal bonds, and may apply proceeds to outstanding indebtedness under its revolving credit and term loan agreement.
In connection with the pricing of the notes, Healthcare Realty L.P. and Healthcare Realty entered into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or one or more other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Healthcare Realty’s class A common stock underlying the notes. If the initial purchasers exercise their option to purchase additional notes, then Healthcare Realty L.P. and Healthcare Realty expect to enter into additional capped call transactions with the option counterparties.
The cap price of the capped call transactions will initially be approximately $27.41 per share, which represents a premium of approximately 40.0% over the last reported sale price of Healthcare Realty’s class A common stock of $19.58 per share on May 4, 2026, and is subject to certain adjustments under the terms of the capped call transactions.
The capped call transactions are expected generally to reduce the potential dilution to Healthcare Realty’s class A common stock upon any exchange of the notes and/or offset any potential cash payments Healthcare Realty L.P. is required to make in excess of the principal amount of exchanged notes, as the case may be, upon exchange of the notes. If, however, the market price per share of Healthcare Realty’s class A common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Healthcare Realty’s class A common stock and/or purchase shares of Healthcare Realty’s class A common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Healthcare Realty’s class A common stock or the notes at that time.
In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Healthcare Realty’s class A common stock and/or purchasing or selling Healthcare Realty’s class A common stock or other securities of Healthcare Realty in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so following any fundamental change repurchase, redemption or early exchange of the notes and during any observation period related to an exchange of notes after October 15, 2031, or, to the extent Healthcare Realty L.P. exercises the relevant election under the capped call transactions, following any other repurchase of the notes). This activity could also cause or avoid an increase or decrease in the market price of Healthcare Realty’s class A common stock or the notes, which could affect the ability to exchange the notes, and, to the extent the activity occurs during any observation period related to an exchange of notes, it could affect the number of shares and value of the consideration that noteholders will receive upon exchange of the notes.
The offer and sale of the notes, the guarantee and any shares of Healthcare Realty’s class A common stock issuable upon exchange of the notes have not been 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. Although Healthcare Realty L.P. and Healthcare Realty will enter into a registration rights agreement pursuant to which Healthcare Realty will agree to register, under the Securities Act, the resale of the shares of Healthcare Realty’s class A common stock, if any, issuable upon exchange of the notes, the registration rights agreement will contain significant limitations, and a resale registration statement may not be available at the time investors wish to resell the shares of Healthcare Realty’s class A common stock, if any, issuable upon exchange of their notes. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of Healthcare Realty’s class A common stock issuable upon exchange 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 Healthcare Realty
Healthcare Realty Trust Incorporated (NYSE: HR) is the largest public, pure-play owner, operator and developer of medical outpatient buildings in the United States.
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 and the effects of entering into the capped call transactions described above. Forward-looking statements represent Healthcare Realty’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 Healthcare Realty’s business, including those described in periodic reports that Healthcare Realty files from time to time with the SEC. Healthcare Realty L.P. 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 neither Healthcare Realty nor Healthcare Realty L.P. undertakes to update the statements included in this press release for subsequent developments, except as may be required by law.
Contact Information
Daniel Gabbay
EVP & Chief Financial Officer
InvestorRelations@healthcarerealty.com
FAQ
What did Healthcare Realty Trust (HR) announce in this 8-K filing?
Healthcare Realty Trust’s operating partnership priced a private offering of $600 million 3.00% exchangeable senior notes due 2032. The deal was upsized from $500 million and will be guaranteed by Healthcare Realty on a senior, unsecured basis for qualified institutional buyers.
What are the key terms of Healthcare Realty Trust’s (HR) 3.00% exchangeable notes?
The notes total $600 million, bear 3.00% interest, and mature on January 15, 2032. They are exchangeable at 43.4660 shares per $1,000 principal, implying a $23.01 exchange price, a 17.5% premium to HR’s $19.58 share price on May 4, 2026.
How will Healthcare Realty Trust (HR) use the net proceeds from the notes offering?
Healthcare Realty L.P. expects net proceeds of about $582.6 million and plans to spend $24.0 million on capped calls, about $75.0 million to repurchase roughly 3.83 million HR shares, and use the remainder plus revolver borrowings to repay 3.500% Senior Notes due 2026.
How do the capped call transactions affect potential dilution for Healthcare Realty (HR) shareholders?
Capped call transactions are structured to reduce potential dilution from exchanging the notes and to offset cash payments above principal. They initially cap economic exposure at about $27.41 per share, a 40.0% premium to $19.58, though dilution may still occur if the stock trades above that cap.
Can the new Healthcare Realty (HR) notes be redeemed or repurchased before 2032?
Healthcare Realty L.P. may redeem the notes for cash from January 22, 2030, if HR’s share price exceeds 130% of the exchange price and conditions are met. Noteholders can also require cash repurchase upon certain “fundamental change” events defined in the indenture.
Is the Healthcare Realty (HR) exchangeable notes offering registered with the SEC?
The notes and any HR shares issuable upon exchange are initially offered in a private transaction exempt from registration. Healthcare Realty will enter a registration rights agreement to register resales of any shares issued on exchange, subject to limitations and possible timing constraints.