ROCHESTER, N.Y. – Broadstone Net Lease, Inc. (BNL), a private real estate investment trust (REIT) managed by Broadstone Real Estate, LLC (Broadstone), today announced that it has received commitments to purchase an aggregate principal amount of $150 million of senior unsecured notes (Notes) to be issued by BNL’s operating company, Broadstone Net Lease, LLC, and guaranteed by BNL. The Notes will be privately placed to a number of insurance companies active in the private placement market. The initial offering was for $100 million and the company elected to upsize the offering based upon strong market demand.
The Notes will be issued at par, will bear interest at a rate of 4.84% per annum (priced at 240 basis points above the 10-year U.S. Treasury yield at the time of pricing), and will have a 10-year maturity. The Notes will also be guaranteed by each of BNL’s subsidiaries that guarantee its bank credit facilities. Nine life insurance companies comprise the lender group that will purchase the notes.
Broadstone Net Lease, LLC obtained an investment grade credit rating of Baa3 (with stable outlook) from Moody’s Investors Service effective April 2016, resulting in greater optionality in the REIT’s pursuit of debt financing. Numerous deep banking relationships currently provide BNL with access to over $980 million worth of unsecured debt capital via three syndicated facilities. The addition of the Notes to BNL’s capital stack serves to diversify BNL’s exposure to any one lender, and helps lengthen out the REIT’s debt maturity schedule.
“The level of support from investors to provide BNL with long-term debt capital is gratifying,” said Chris Czarnecki, CEO of Broadstone and BNL. “Our team was delighted that the offering was more than five times oversubscribed and we plan to be a regular issuer in this market. Such support re-affirms our strategy of building shareholder value over the long-term with a conservative balance sheet and a strong commitment to maintaining our investment grade credit rating.”
The closing and issuance of the Notes is anticipated to occur in April, 2017 and is subject to customary closing conditions, execution of a definitive note purchase agreement, the form of which has been previously agreed, and the absence of a material adverse change prior to closing.
J.P. Morgan Securities, LLC and Wells Fargo Securities, LLC served as BNL’s joint lead placement agents.
About Broadstone Net Lease:
Broadstone Net Lease, Inc. (BNL) invests in freestanding, single-tenant, triple-net leased commercial properties located throughout the United States, primarily via sale & leaseback, lease assumption, and UPREIT transactions. UPREIT transactions, (where “UPREIT” stands for Umbrella Partnership REIT), provide a tax deferred exit strategy for owners of real estate who might otherwise recognize a significant taxable gain in a cash sale of a highly appreciated property with a low tax basis. With a diversified portfolio of 419 medical, industrial and retail properties in 37 states, the REIT targets individual or portfolio acquisitions within the $10 to $200+ million range.
There are currently more than 2,000 shareholders in BNL, which is externally managed by Broadstone Real Estate, LLC. BNL remains open for new investment by accredited investors on a monthly basis, with a minimum direct investment of $500,000. Shares are offered directly by BNL via private placement. Please see certain important disclosures regarding BNL at broadstone.com/disclosures.
Accredited investors are invited to download an investor kit: Broadstone.com/DPP