Back to top

SL Green Realty (SLG) Prices Senior Notes Worth $500M

Read MoreHide Full Article

SL Green Operating Partnership, L.P., SL Green Realty Corp.’s (SLG - Free Report) operating partnership, has announced the pricing of senior notes valued at $500 million.

The offering comprises 3.250% senior unsecured obligations of the operating partnership and will mature in 2022. It will be unconditionally and fully guaranteed by the company and wholly owned subsidiary of SL Green Operating Partnership, L.P. — Reckson Operating Partnership, L.P.

The company anticipates raising nearly $495.25 million from this offering. This amount is estimated after making adjustments for underwriting discount and estimated fees and expenses. The offering is anticipated to close on Oct 5, after complying with the customary closing conditions.

The operating partnership plans to utilize the net proceeds of this offering to initially settle a 3% Exchangeable Senior Notes borrowing set to mature in 2017. Thereafter, the remaining proceeds will be used for general corporate purposes, which may include shrinking debt obligations undertaken by the operating partnership.

We believe the senior notes offering will bring down the company’s cost of capital, which will, in turn, strengthen the balance sheet and fuel growth. A balanced capital structure, along with a robust operating platform, will likely enable it to execute strategic priorities and drive growth in net asset value.

Currently, the company carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for funds from operation (FFO) per share for full-year 2017 has been revised upward to $6.55 in a month’s time.

However, due to the unfavorable environment in the office and retail sector, shares of this real estate investment trust (REIT) have underperformed the industry it belongs to, year to date. The company’s shares have lost 4%, while the industry recorded growth of 4.1%, during this time period.

Stocks to Consider

Better-ranked stocks in the REIT space include Seritage Growth Properties , Sabra Healthcare REIT, Inc. (SBRA - Free Report) and Communications Sales & Leasing, Inc. (UNIT - Free Report) . While Seritage and Sabra Healthcare flaunt a Zacks Rank of 1 (Strong Buy), Communications Sales & Leasing carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Seritage’s 2017 FFO per share estimates inched up 0.5% to $2.01 in the past 60 days.

Sabra Healthcare’s 2017 FFO per share estimates climbed 3% to $2.38 over the past month.

Communications Sales & Leasing’s 2017 FFO per share estimates climbed 14.4% to $2.54 in two months’ time.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Can Hackers Put Money INTO Your Portfolio?

Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.

Zacks has just released Cybersecurity! An Investor’s Guide to help readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.

Download the new report now>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Sabra Healthcare REIT, Inc. (SBRA) - free report >>

SL Green Realty Corporation (SLG) - free report >>

Communications Sales & Leasing,Inc. (UNIT) - free report >>

More from Zacks Analyst Blog

You May Like