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BOSTON - BXP, Inc. (NYSE:BXP), the largest publicly traded developer and owner of premier workplaces in the United States, with a market capitalization of $13.3 billion, announced Wednesday that its operating partnership has priced an $850 million offering of exchangeable senior notes due 2030. According to InvestingPro analysis, BXP currently trades below its Fair Value, making it one of the potentially undervalued real estate stocks on the market.
The offering, which was upsized from the previously announced $600 million, is expected to settle on September 29, according to a company press release. The 2.000% exchangeable senior notes will mature on October 1, 2030, with interest payable semi-annually beginning April 1, 2026. This debt offering comes as BXP maintains a debt-to-equity ratio of 3.15 and total debt of $16.6 billion, metrics that InvestingPro subscribers can track along with over 30 other key financial indicators.
The notes will be exchangeable into cash up to the aggregate principal amount, with any remainder settled in cash, BXP common stock, or a combination at the company’s discretion. The initial exchange rate is 10.8180 shares per $1,000 principal amount, representing an exchange price of approximately $92.44 per share – a 22.5% premium over BXP’s last reported sale price of $75.46 on September 24.
In connection with the offering, BXP entered into capped call transactions with certain financial institutions to reduce potential dilution upon exchange of the notes. The cap price was set at approximately $105.64 per share, representing a 40% premium over BXP’s last reported share price.
The company estimates net proceeds of approximately $828.8 million, or $975.2 million if the initial purchasers exercise their option to purchase additional notes. BXP intends to use approximately $29.8 million to pay for the capped call transactions, with the remainder funding part of the repayment of its $1.0 billion 3.650% senior notes due February 1, 2026. This refinancing comes as BXP maintains its 29-year streak of consecutive dividend payments, though InvestingPro data indicates its current ratio of 0.89 suggests some pressure on short-term liquidity. For a comprehensive analysis of BXP’s financial health and future prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
The notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.
In other recent news, Boston Properties Inc. announced plans for a $600 million offering of exchangeable senior notes due in 2030, with the possibility of an additional $90 million in notes. This move is part of a broader strategy discussed during the company’s investor day, where it revealed plans to sell nearly $2 billion in assets, a figure significantly higher than initial expectations. Piper Sandler maintained an Overweight rating for the company, highlighting the ambitious asset sale plan. Meanwhile, KeyBanc reiterated its Sector Weight rating, noting Boston Properties’ strategy to lease more space and focus on existing properties through 2027. Truist Securities adjusted its price target for Boston Properties to $77, maintaining a Hold rating, citing the company’s focus on high-performing properties. BMO Capital lowered its price target to $84 but kept an Outperform rating, noting management’s optimism about occupancy growth. These developments underscore Boston Properties’ strategic shifts and financial maneuvers aimed at future growth.
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