LOS ANGELES - Rexford Industrial Realty, Inc. (NYSE:REXR), a real estate investment trust specializing in industrial properties, has priced $1 billion in exchangeable senior notes in a private offering to qualified institutional buyers. The offering includes two series of notes: $500 million due 2027 with an interest rate of 4.375%, and $500 million due 2029 with an interest rate of 4.125%.
The notes, guaranteed by Rexford Industrial, are scheduled to settle on March 28, 2024, given all standard closing conditions are met. Additionally, the initial purchasers have a 30-day option to buy up to $75 million more of each series to cover over-allotments.
Interest on the notes will be paid semi-annually, starting September 15, 2024. The 2027 notes will mature on March 15, 2027, and the 2029 notes on March 15, 2029, unless repurchased, exchanged, or redeemed earlier. Noteholders can exchange their notes for cash and, potentially, Rexford Industrial's common stock, with the initial exchange rate set at 15.7146 shares per $1,000 principal amount, equating to an initial exchange price of about $63.64 per share. This price is a 30% premium over the common stock's last reported sale price of $48.95 on March 26, 2024.
The 2027 notes are non-redeemable before maturity, while the 2029 notes can be redeemed for cash at the issuer's discretion under specific conditions. If a "fundamental change" occurs, noteholders may require the notes to be repurchased for cash at the principal amount plus accrued interest.
Rexford Industrial anticipates net proceeds of approximately $978.8 million, or $1,126.2 million if over-allotment options are exercised, after deducting discounts, commissions, and expenses. The funds are intended for future acquisitions, development activities, and general corporate purposes.
The notes, guarantees, and any shares of common stock deliverable upon exchange have not been registered under the Securities Act or any state securities laws and are being offered only through exemptions from registration requirements.
InvestingPro Insights
Rexford Industrial Realty, Inc. (REXR) continues to demonstrate financial resilience and strategic growth in the industrial real estate sector. According to InvestingPro Data, the company has a market capitalization of $11.29 billion and has experienced a robust revenue growth of 26.4% over the last twelve months as of Q4 2023. This growth is supported by a strong gross profit margin of 76.88%, reflecting the company's effective cost management and pricing strategies.
Investors may find it compelling that Rexford Industrial has raised its dividend for 11 consecutive years, showcasing a commitment to shareholder returns. This is further substantiated by a significant dividend growth of 32.54% over the same period. Additionally, the company's liquid assets surpass its short-term obligations, indicating a sound liquidity position which is critical for ongoing operations and investment opportunities.
For those considering an investment in Rexford, InvestingPro Tips highlight that the stock is currently trading at a high P/E ratio relative to near-term earnings growth, with a P/E ratio of 43.67 and an adjusted P/E ratio for the last twelve months of 50.19. This suggests that the stock is being valued by the market at a premium, possibly due to its strong performance and market position. Moreover, the RSI suggests the stock is in oversold territory, which could indicate a potential buying opportunity for investors.
For more detailed analysis and additional InvestingPro Tips, including whether Rexford is operating with a moderate level of debt, analysts' profitability predictions for the year, and a comprehensive look at the company's return over the last decade, visit InvestingPro. Subscribers can access over 10 additional tips to further inform their investment decisions. Use the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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