ADC.NYSEAgree Realty CORP
8-K: Agree Realty Corporation Announces $400 Million Public Offering of 5.600% Notes Due 2035
Sentiment:
Debt Offering Announcement
Agree Realty Corporation's subsidiary, Agree Limited Partnership, has entered into an underwriting agreement for a $400 million public offering of 5.600% notes due in 2035.
Capital raiseAgree Limited Partnership is issuing $400 million in aggregate principal amount of 5.600% Notes due 2035.The offering is being underwritten by a syndicate of banks led by J.P. Morgan Securities LLC, Mizuho Securities USA LLC, PNC Capital Markets LLC, and Wells Fargo Securities, LLC.
Summary
- Agree Limited Partnership, a subsidiary of Agree Realty Corporation, is undertaking a public offering of $400 million in aggregate principal amount of 5.600% Notes due 2035.
- The offering is being made through an underwriting agreement with J.P. Morgan Securities LLC, Mizuho Securities USA LLC, PNC Capital Markets LLC, and Wells Fargo Securities, LLC, acting as representatives of the underwriters.
- The notes are to be issued pursuant to an indenture dated August 17, 2020, as supplemented by an officers certificate to be dated May 23, 2025.
- The notes are guaranteed by Agree Realty Corporation and certain of its subsidiaries.
- The Issuer and the Parent have prepared and filed on May 5, 2023 with the United States Securities and Exchange Commission (the Commission) in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the Act), a shelf registration statement on Form S-3 (File No. 333-271668) under the Act (Registration Statement 333-271668), including a combined prospectus contained therein (the Basic Prospectus), relating to the issuance and sale of certain debt securities to be issued by the Issuer, including the Notes, and guarantees of debt securities of the Issuer by the Parent (the Parent Guarantee) and certain of the Guarantors (the Subsidiary Guarantees), and the Issuer and the Guarantors have prepared and filed on May 6, 2024 and May 14, 2025 with the Commission post-effective amendments to Registration Statement 333-271668 (the Registration Statement Amendment) to register the guarantees of certain additional Subsidiary Guarantors (such guarantees, together with the Subsidiary Guarantees and the Parent Guarantee, the Guarantees).
Sentiment
Score: 7
Explanation: The document is a standard announcement of a debt offering, which is generally viewed as neutral to slightly positive. The terms of the offering appear reasonable, and the company is using the proceeds for general corporate purposes.
Positives
- The offering extends the Issuer's weighted-average debt maturity to approximately 6.4 years, excluding the unsecured revolving credit facility.
- The Issuer will have a liquidity position of approximately $2.6 billion.
Risks
- The underwriting agreement is subject to certain conditions, and the offering may not be completed if these conditions are not met.
- The notes are subject to market risk and changes in interest rates.
- The Issuer and Guarantors are subject to various legal and regulatory risks as detailed in the Registration Statement and Prospectus.
Future Outlook
The Issuer intends to use the net proceeds from the sale of the Notes as specified in the Registration Statement, the Disclosure Package and the Prospectus under the heading Use of Proceeds.
Industry Context
This offering is typical for REITs like Agree Realty, which frequently use debt financing to fund acquisitions and development. The interest rate and terms are reflective of current market conditions for investment-grade REIT debt.
Comparison to Industry Standards
- The 5.600% coupon rate is within the typical range for investment-grade REIT debt with a 10-year maturity in the current market environment.
- Comparable REITs like Realty Income (O) and National Retail Properties (NNN) have recently issued debt with similar terms.
- The spread to the benchmark treasury is also in line with recent REIT debt offerings.
Stakeholder Impact
- Shareholders: The offering will increase the company's debt but also provides additional capital for investment.
- Employees: No direct impact is expected.
- Customers: No direct impact is expected.
- Creditors: The offering will increase the company's overall debt obligations.
- Suppliers: No direct impact is expected.
Next Steps
- The Issuer and Underwriters will proceed to close the offering on May 23, 2025, subject to customary closing conditions.
- The Issuer will file the final prospectus supplement with the SEC.
Key Dates
| Date | Description |
|---|---|
| 1994-07-08 | Amended and Restated Registration Rights Agreement |
| 1994-04-22 | First Amended and Restated Agreement of Limited Partnership of Agree Limited Partnership |
| 2013-03-20 | Second Amendment to First Amended and Restated Agreement of Limited Partnership of Agree Limited Partnership |
| 2014-07-01 | Amended Employment Agreement between Agree Realty Corporation and Joey Agree |
| 2015-05-28 | Note Purchase Agreement by Agree Limited Partnership |
| 2016-07-28 | Note Purchase Agreement among Agree Realty Corporation, Agree Limited Partnership, Teachers Insurance and Annuity Association of America, The Guardian Life Insurance Company of America and Advantus Capital Management, Inc. |
| 2017-02-16 | Agree Realty Corporation 2017 Executive Incentive Plan |
| 2017-08-03 | Uncommitted Master Note Facility among Agree Limited Partnership, Agree Realty Corporation and Teachers Insurance and Annuity Associate of America (TIAA) and each TIAA Affiliate |
| 2017-08-03 | Note Purchase Agreement, dated August 3, 2017, among Agree Limited Partnership, Agree Realty Corporation and the purchasers named therein |
| 2018-07-18 | Form of Revolving Note under the Increase Agreement |
| 2018-09-26 | First Supplement to Uncommitted Master Note Facility among Agree Limited Partnership, Agree Realty Corporation and TIAA |
| 2018-09-26 | First Supplement to Uncommitted Master Note Facility among Agree Limited Partnership, Agree Realty Corporation, AIG and the institutional investors named therein |
| 2019-06-14 | Note Purchase Agreement, dated as of June 14, 2019, among Agree Limited Partnership, Agree Realty Corporation and the purchasers named therein |
| 2019-12-07 | Summary of Material Terms of Compensation Arrangement with Danielle M. Spehar (effective December 7, 2019) |
| 2020-06-18 | Employment Agreement dated June 18, 2020, between Agree Realty Corporation and Craig Erlich |
| 2020-08-17 | Indenture, dated August 17, 2020, among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank Trust Company, National Association as successor in interest to U.S. Bank National Association |
| 2020-08-17 | Indenture Officers Certificate, dated August 17, 2020, among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank Trust Company, National Association as successor in interest to U.S. Bank National Association |
| 2020-08-19 | Addendum to Employment Agreement dated August 19, 2020, between Agree Realty Corporation and Craig Erlich |
| 2021-05-14 | Date of report (Date of earliest event reported) |
| 2021-05-14 | Indenture Officers Certificate, dated as of May 14, 2021, among Agree Limited Partnership, Agree Realty Corporation, and U.S. Bank Trust Company, National Association |
| 2021-09-17 | Second Amended and Restated Agreement of Limited Partnership of Agree Limited Partnership, dated as of September 17, 2021 |
| 2022-01-05 | Employment Agreement, dated January 5, 2022, between Agree Realty Corporation and Peter Coughenour |
| 2022-08-22 | Indenture Officers Certificate, dated as of August 22, 2022, among Agree Limited Partnership, Agree Realty Corporation, and U.S. Bank Trust Company, National Association |
| 2022-09-17 | Master Deposit Agreement, dated as of September 17, 2022, by and among Agree Realty Corporation, Computershare Inc. and Computershare Trust Company, N.A., as depositary, and the holders from time to time of the depositary receipts described therein relating to shares of preferred stock of Agree Realty Corporation |
| 2023-05-05 | The Issuer and the Parent have prepared and filed on May 5, 2023 with the United States Securities and Exchange Commission (the Commission) in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the Act), a shelf registration statement on Form S-3 (File No. 333-271668) under the Act (Registration Statement 333-271668), including a combined prospectus contained therein (the Basic Prospectus), relating to the issuance and sale of certain debt securities to be issued by the Issuer, including the Notes, and guarantees of debt securities of the Issuer by the Parent (the Parent Guarantee) and certain of the Guarantors (the Subsidiary Guarantees) |
| 2023-07-31 | Term Loan Agreement, dated as of July 31, 2023 by and among Agree Realty Corporation, Agree Limited Partnership, PNC Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein |
| 2023-10-01 | Employment Agreement, dated October 1, 2023, by and between Agree Realty Corporation and Joel Agree |
| 2023-10-03 | Reimbursement Agreement, dated October 3, 2023, by and between Agree Realty Corporation and Richard Agree |
| 2024-05-06 | The Issuer and the Guarantors have prepared and filed on May 6, 2024 and May 14, 2025 with the Commission post-effective amendments to Registration Statement 333-271668 (the Registration Statement Amendment) to register the guarantees of certain additional Subsidiary Guarantors (such guarantees, together with the Subsidiary Guarantees and the Parent Guarantee, the Guarantees). |
| 2024-05-13 | Indenture Officers Certificate, dated as of May 13, 2024, among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association |
| 2024-08-08 | Fourth Amended and Restated Credit Agreement, dated as of August 8, 2024, by and among Agree Realty Corporation, Agree Limited Partnership, PNC Bank, National Association as Administrative Agent, and a syndicate of lenders named therein |
| 2024-08-08 | First Amendment to Term Loan Agreement, dated as of August 8, 2024 by and among Agree Realty Corporation, Agree Limited Partnership, PNC Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein |
| 2025-05-05 | The Issuer and the Parent have prepared and filed on May 5, 2023 with the United States Securities and Exchange Commission (the Commission) in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the Act), a shelf registration statement on Form S-3 (File No. 333-271668) under the Act (Registration Statement 333-271668), including a combined prospectus contained therein (the Basic Prospectus), relating to the issuance and sale of certain debt securities to be issued by the Issuer, including the Notes, and guarantees of debt securities of the Issuer by the Parent (the Parent Guarantee) and certain of the Guarantors (the Subsidiary Guarantees), and the Issuer and the Guarantors have prepared and filed on May 6, 2024 and May 14, 2025 with the Commission post-effective amendments to Registration Statement 333-271668 (the Registration Statement Amendment) to register the guarantees of certain additional Subsidiary Guarantors (such guarantees, together with the Subsidiary Guarantees and the Parent Guarantee, the Guarantees). |
| 2025-05-14 | Agree Limited Partnership entered into an underwriting agreement for the public offering of $400 million aggregate principal amount of the Issuers 5.600% Notes due 2035. |
| 2025-05-14 | Applicable Time shall mean 2:50 p.m. (Eastern Time) on May 14, 2025 or such other time as agreed by the Issuer and the Representatives. |
| 2025-05-16 | Date of report signed by Peter Coughenour, Chief Financial Officer and Secretary of Agree Realty Corporation. |
| 2025-05-23 | Closing Date for the delivery of and payment for the Notes. |
| 2025-05-23 | Settlement Date: May 23, 2025 (T+7); under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended trades in the secondary market generally are required to settle in two business days, unless the parties to that trade expressly agree otherwise. |
| 2025-06-15 | First interest payment date. |
| 2035-03-15 | Optional Redemption: Prior to March 15, 2035 (three months prior to the Stated Maturity Date of the Notes), make-whole call at T+20 basis points (calculated as though the actual Stated Maturity Date of the Notes was March 15, 2035) |
| 2035-03-15 | On or after March 15, 2035 (three months prior to the Stated Maturity Date of the Notes), par call |
| 2035-06-15 | Stated Maturity Date of the Notes. |
Keywords
notes, offering, underwriting, debt, agree realty, agree limited partnership, securities
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