Back to top

Analyst Blog

First Potomac Realty Trust (FPO - Snapshot Report) recently generated net proceeds of approximately $104.9 million from an equity offering of nearly 7.5 million shares. The move comes as part of its efforts to infuse capital and repay debt.

In particular, First Potomac closed the offering of 7,475,000 common shares (including 975,000 common shares issued and sold pursuant to the exercise of the underwriters’ option to acquire additional common shares in full) at a price of $14.70 per share. This helped the company reap $104.9 million as net proceeds after the deduction of the underwriting discount and estimated offering costs.

First Potomac will use this fund primarily for repayment of the outstanding debt under secured term loans and part of the outstanding debt under its unsecured revolving credit facility. In addition, the company plans to utilize the amount for meeting other corporate needs.

We believe that though this public offering leads to share dilution for First Potomac, the repayment of debt is a strategic fit as it would reduce its interest expenses. Also, an increase in financial flexibility through this offering would poise the company well for investment and acquisition prospects.

Several major banks helped First Potomac in this equity offering. Wells Fargo Securities of Wells Fargo & Company (WFC - Analyst Report) and KeyBanc Capital Markets of KeyCorp (KEY - Analyst Report) served as joint book-running managers. On the other hand, Morgan Stanley (MS - Analyst Report), BMO Capital Markets and a number of other companies acted as co-lead managers.

Currently, First Potomac carries a Zacks Rank #3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%