Corporate Office Properties Trust (OFC), a real estate investment trust (REIT), has recently priced a public offering of 7.5 million shares at $24.75 each to enhance its liquidity. The company has also decided to grant the underwriters a 30-day option to purchase up to an additional 1.12 million shares to cover any over-allotment options.
Corporate Office Properties intends to utilize the net proceeds from the offering to repay debt outstanding on its unsecured revolving credit facility and for general corporate purposes.
Wells Fargo Securities LLC, part of Wells Fargo & Company (WFC); J.P. Morgan, part of JP Morgan Chase & Co (JPM); Barclays, part of Barclays, PLC (BCS); are the joint book running managers for the offering.
As of June 30, 2012, Corporate Office Properties had a total market capitalization of $4.4 billion, with $2.2 billion in debt outstanding. Debt-to-total market capitalization ratio stood at 50%. In August 2012, the company entered into a $120 million term loan agreement with the option to expand the amount to a maximum of $200 million. The loan had a seven-year term and a variable interest rate of LIBOR plus 2.10% to 2.60%.
Headquartered in Columbia, Maryland, Corporate Office Properties engages in the acquisition, development, ownership, management and lease of suburban office properties. It focuses primarily on serving the specialized tenant requirements of U.S. Government and Defense Information Technology tenants.
The company acquires and leases office and data center properties that are concentrated in large office parks, largely located adjacent to government demand drivers and in strong markets that possess growth opportunities. As of June 30, 2012, the company’s consolidated portfolio consists of 228 office properties spanning 19.8 million rentable square feet.
Corporate Office Properties currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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