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Realty Income Expands Credit Facilities and Commercial Paper Programs

Realty Income Corporation, recognized as The Monthly Dividend Company®, has announced a significant enhancement of its financial capabilities by recasting and expanding its revolving credit facilities to a total of $5.5 billion. This marks an increase from its previous capacity of $4.0 billion. Along with this, the company has expanded its commercial paper programs, also increasing their capacity to $5.5 billion, up from the earlier $3.0 billion. This strategic decision aligns with Realty Income's commitment to maintaining robust financial flexibility and facilitating continuous growth.

Enhanced Financial Flexibility

According to Jonathan Pong, the Chief Financial Officer and Treasurer of Realty Income, access to efficiently priced capital has been a long-standing competitive advantage for the company, allowing it to navigate the market effectively. The increased borrowing capacity not only bolsters financial standing but also opens the door to pursuing accretive opportunities that align with the company’s strategic vision.

The new revolving credit facilities consist of two tranches of $2.75 billion each, with initial maturity dates set for April 29, 2029, and July 10, 2030. Importantly, these tranches come with options for two six-month extensions. The terms associated with these facilities, tethered to Realty Income's current A3/A- credit ratings, stipulate a borrowing rate of 67.5 basis points over the SOFR (Secured Overnight Financing Rate) for U.S. Dollar loans, and a facility commitment fee of 12.5 basis points. This results in an all-inclusive drawn pricing of just 80 basis points over SOFR, a noteworthy reduction from previous lending terms.

Strong Participation from Lenders

A total of 26 lenders, including notable institutions such as Wells Fargo Bank (as the Administrative Agent), JPMorgan Chase Bank, and BofA Securities, are partaking in the updated revolving credit facilities. Their involvement underscores the trust placed in Realty Income’s business model and its financial strategies.

Expanded Commercial Paper Programs

In tandem with the updates to its credit facilities, Realty Income has also launched expanded commercial paper programs comprising an upsized U.S. and European commercial paper program, each with a capacity of $2.75 billion. The notes offered will conform to traditional terms applicable within the U.S. and European commercial paper markets, thereby ranking in parity with other unsecured senior indebtedness. Notably, these funds may serve as a liquidity backstop, assuring the repayment of any notes issued under these new programs.

It's important to note that the notes from these programs have not been and will not be registered under the Securities Act of 1933, hence they cannot be offered or sold within the United States without proper registration or an applicable exemption.

About Realty Income Corporation

Founded in 1969, Realty Income Corporation (NYSE: O) has become a significant player in the commercial real estate sector, currently managing over 15,500 properties across all 50 states, the U.K., and several European countries. It is renowned for its consistent monthly dividends, having declared 673 consecutive monthly dividends. This achievement places it among the elite group of companies recognized as members of the S&P 500 Dividend Aristocrats®, thanks to its unwavering commitment to increasing dividends for over 31 consecutive years.

Realty Income’s business model revolves around investing in properties that yield dependable monthly returns, thus cementing its position as a reliable investment partner for leading global companies. Further information about its offerings and operations can be accessed through Realty Income's website. 

Conclusion

The recent expansions in credit facilities and commercial paper programs represent a proactive step by Realty Income towards maintaining financial agility in a rapidly evolving market. These developments affirm the company's dedication to ensuring continued success and delivering value to its investors while exploring avenues for growth and diversification.