ITEM 1.01
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ENTRY INTO A MATERIAL AGREEMENT
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On November 14, 2018, Kilroy Realty, L.P. (the Operating Partnership) and Kilroy Realty Corporation (the Company)
entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters (the
Underwriters) listed on Schedule A attached thereto, relating to the public offering by the Operating Partnership of $400,000,000 aggregate principal amount of the Operating Partnerships 4.750% Senior Notes due 2028 (the 2028
Notes).
Pursuant to the Underwriting Agreement, the Company has agreed to sell to the several Underwriters, and the Underwriters
have severally agreed to purchase, $400,000,000 aggregate principal amount of 2028 Notes. The 2028 Notes will be guaranteed by the Company. The 2028 Notes will pay interest semi-annually at a rate of 4.750% per annum on June 15 and
December 15 each year, commencing on June 15, 2019, and mature on December 15, 2028. The public offering price of the 2028 Notes was 99.634% of the principal amount, for a yield to maturity of 4.796%. The offering is expected to close
on November 29, 2018, subject to the satisfaction of customary closing conditions.
Net proceeds from the offering will be
approximately $395.2 million, after deducting the underwriting discount and the Companys estimated expenses. The Company intends to allocate an amount equal to the net proceeds from the offering to one or more Eligible Green Projects (as
defined), which may include the development or redevelopment of such projects.
Pending the allocation of an amount equal to the net
proceeds from the offering to Eligible Green Projects, the Company intends to use the net proceeds to redeem or repay indebtedness and may also hold net proceeds in cash and cash equivalents. Such indebtedness to be redeemed or repaid includes all
$250.0 million aggregate principal amount (plus the make-whole premium and accrued and unpaid interest) of the Operating Partnerships 2020 Notes (defined below) and may include borrowings under the Operating Partnerships revolving
credit facility and term loan facility.
This Current Report on Form
8-K
shall not constitute an
offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any jurisdiction in which, or to any person to whom, such offer, solicitation or sale would be unlawful.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by the full text of
the Underwriting Agreement, which is being filed as Exhibit 1.1 to this Current Report on Form
8-K
and is incorporated herein by reference.