NEW YORK, NY -- NorthStar Realty Finance Corp. ("NorthStar") (NYSE:NRF) today announced that NorthStar Realty Finance Limited Partnership, the operating partnership through which NorthStar conducts its operations, has priced a private offering of $150 million aggregate principal amount of the operating partnership's 7.25% exchangeable senior notes due 2027 (the "Notes"). The operating partnership has granted to the initial purchasers of the Notes a 30-day option to purchase up to an additional $22.5 million aggregate principal amount of Notes solely to cover over-allotments, if any. The Notes will be senior unsecured obligations of the operating partnership, exchangeable for cash, shares of NorthStar's common stock, or a combination of cash and shares of NorthStar's common stock, at the operating partnership's option. NorthStar has guaranteed the payment of amounts due on the Notes.
NorthStar expects to use the net proceeds from the sale of the Notes to repay indebtedness under its subsidiaries' credit facility, acquire investments relating to its business and for general corporate purposes.
Prior to June 15, 2027, upon the occurrence of specified events, the Notes will be exchangeable by the holders into cash, shares of NorthStar's common stock or a combination of cash and shares of NorthStar's common stock, at the operating partnership's option. The initial exchange rate will be 59.1935 shares per $1,000 principal amount of Notes. The initial exchange price of approximately $16.89 represents a 27.5% premium over the last reported sale price per share on the NYSE of NorthStar's common stock on June 12, 2007, which was $13.25 per share. On or after March 15, 2027, the Notes will be exchangeable by the holders at any time prior to the close of business on the second business day immediately preceding the maturity date into cash, shares of NorthStar's common stock or a combination of cash and shares of NorthStar's common stock at the operating partnership's option, at the above initial exchange rate. The initial exchange rate is subject to adjustment in certain circumstances.
Prior to June 15, 2014, the Notes will not be redeemable at the option of the operating partnership, except to preserve NorthStar's status as a real estate investment trust and on or after June 15, 2012, but prior to June 15, 2014, if during any period of 30 consecutive trading days, the closing sale price of a share of NorthStar's common stock is greater than or equal to 130% of the exchange price at the beginning of such period for at least 20 trading days within such period of 30 consecutive trading days. On or after June 15, 2014, the operating partnership may redeem all or a portion of the Notes. In each case the redemption price will be payable in cash in an amount equal to the principal amount of the Notes to be redeemed plus accrued and unpaid interest (including additional interest), if any.
The holders of the Notes may require the operating partnership to repurchase all or a portion of the Notes at a purchase price in cash equal to the principal amount of the Notes to be repurchased plus accrued and unpaid interest (including additional interest), if any, on the Notes on each of June 15, 2012, June 15, 2014, June 15, 2017 and June 15, 2022, and upon certain designated events.
The Notes will be sold only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Notes and any shares of NorthStar's common stock that may be issued upon exchange of the Notes have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws. NorthStar has agreed to file a registration statement regarding resales of the shares of common stock of NorthStar issuable upon exchange of the Notes with the Securities and Exchange Commission within 120 days of the closing of this private offering.
This release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Safe Harbor Statement
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward- looking statements; NorthStar Realty can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from NorthStar Realty's expectations include, but are not limited to changes in economic conditions generally and the real estate and bond markets specifically, legislative or regulatory changes (including changes to laws governing the taxation of REITs), availability of capital, interest rates and interest rate spreads, policies and rules applicable to REITs, the continued service of key management personnel, the effect of competition in the real estate finance industry, the costs associated with compliance and corporate governance, including the Sarbanes-Oxley Act and related regulations and requirements, and other risks detailed from time to time in NorthStar Realty's SEC reports. Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. Such forward-looking statements speak only as of the date of this press release. NorthStar Realty expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
About NorthStar Realty Finance Corp.
NorthStar Realty Finance Corp. is an internally managed REIT that primarily originates and invests in commercial real estate debt, real estate securities and net lease properties. For more information about NorthStar Realty Finance Corp., please visit www.nrfc.com.
Source: NorthStar Realty Finance Corp.
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CONTACT: Investor Relations, Julie Tu, for NorthStar Realty Finance
Corp., +1-212-827-3776
Web site: http://www.nrfc.com/
About This Release
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