Duke Realty Limited Partnership, an operating partner of real estate investment trust (REIT) Duke Realty Corporation (DRE - Analyst Report), has recently priced $300 million of 4.375% senior unsecured notes due June 15, 2022 in an underwritten public offering.The notes are priced at 99.271% of the face amount to yield 4.466% at maturity.The offering is expected to close on June 11, 2012.
Net proceeds from the debt offer will be used to repay debt including all or a portion of outstanding borrowings under the operating partnership's existing revolving credit facility, and for other general corporate purposes.
During the first quarter of 2012, the company issued 10.8 million new shares of common stock generating net proceeds of approximately $147 million to increase liquidity.
Duke Realty maintains a balanced and flexible balance sheet with ample liquidity and minimal debt maturities that enable it to capitalize on potential acquisition opportunities to fuel its top-line growth.
At the end of first quarter 2012, the company had nearly $15.0 million of cash with no outstanding debt on its line of credit. The total-debt-to-undepreciated-assets covenant was 49.25% at quarter end, while the debt service coverage ratio was 2.19x.
Headquartered in Indianapolis, Duke Realty is engaged in owning, managing and developing industrial, healthcare and office properties across the U.S.For over 35 years, the company has leveraged its local presence and its integrated platform to drive returns, and has established itself as a premier publicly traded real estate developer in the country.
Duke Realty currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We maintain our long-term Neutral recommendation on the stock. One of its competitors, Highwoods Properties Inc. (HIW - Analyst Report), also holds a Zacks #3 Rank.