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Filed Pursuant to rule: 424(B5)
File Number: 333-108557-01
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 21, 2003)
$125,000,000
3.35% Notes Due 2008
The notes will bear interest at the rate of 3.35% per year. Interest on the notes will be payable on January 15 and July 15 of each year, beginning July 15, 2004. The notes will mature on January 15, 2008. We may redeem the notes at any time at our option, in whole or in part, at the redemption price described in this prospectus supplement.
The notes will be unsecured and will rank equally with all of our other existing and future unsecured and unsubordinated indebtedness. The notes will be issued only in registered form in denominations of $1,000 and integral multiples of $1,000.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or determined that this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
| Initial Offering Price(1) | Underwriting Discounts | Proceeds to Us(1) | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Per Note | 99.97 | % | .50 | % | 99.47 | % | ||||
Total | $ | 124,962,500 | $ | 625,000 | $ | 124,337,500 |
- (1)
- Plus accrued interest from January 16, 2004, if settlement occurs after that date.
The notes are expected to be delivered in book-entry form through The Depository Trust Company on or about January 16, 2004.
Joint Book-Running Managers
Banc of America Securities LLC | Merrill Lynch & Co. |
Banc One Capital Markets, Inc. | JPMorgan |
The date of this prospectus supplement is January 13, 2004.
You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information provided by this prospectus supplement or the accompanying prospectus is accurate as of any date other than the respective dates on the front of this prospectus supplement or the accompanying prospectus.
| Page | |
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Use of Proceeds | S-3 | |
Ratio of Earnings to Fixed Charges | S-3 | |
Description of the Notes | S-3 | |
Underwriting | S-6 | |
Legal Matters | S-7 | |
Page | ||
About this Prospectus | 1 | |
Duke and the Operating Partnership | 1 | |
Use of Proceeds | 2 | |
Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends | 2 | |
Description of Debt Securities | 3 | |
Description of Preferred Stock | 14 | |
Description of Depositary Shares | 20 | |
Description of Common Stock | 24 | |
Federal Income Tax Considerations | 27 | |
Plan of Distribution | 42 | |
Legal Matters | 43 | |
Experts | 43 | |
Where You Can Find More Information | 43 |
Duke Realty Limited Partnership is an Indiana limited partnership. Our principal offices are located at 600 East 96th Street, Suite 100, Indianapolis, IN 46240 and our telephone number at that address is (317) 808-6000. Our website is located at http://www.dukerealty.com. The information contained on our website is not part of this prospectus supplement or the accompanying prospectus.
All references to "Duke" or the "Operating Partnership" in this prospectus supplement mean Duke Realty Limited Partnership and all entities owned or controlled by Duke Realty Limited Partnership, except where it is made clear that the term means only Duke Realty Limited Partnership.
This prospectus supplement and the accompanying prospectus may not contain all the information that may be important to you. You should read the entire prospectus supplement and accompanying prospectus, as well as the documents incorporated by reference in the accompanying prospectus before making an investment decision.
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We expect to receive net proceeds from the sale of the notes of approximately $124.2 million, after deducting commissions, discounts and offering expenses. We presently intend to use the net proceeds to reduce the outstanding balance on our unsecured line of credit used to fund development and acquisition of additional rental properties and for general corporate purposes. Our unsecured line of credit had an aggregate of $385.0 million outstanding as of September 30, 2003, bears interest at LIBOR plus .65% and matures in February 2004. Affiliates of Banc of America Securities LLC, Banc One Capital Markets, Inc. and J.P. Morgan Securities Inc., underwriters of this offering, are lenders under our unsecured line of credit and, therefore, will each receive a share of the net proceeds of the offering proportionate to its commitment under the unsecured line of credit.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges was 2.26x for the nine months ended September 30, 2003. For purposes of computing this ratio, earnings have been calculated by adding fixed charges, excluding capitalized interest, to income (loss) before gains or losses on property sales. Fixed charges consist of interest costs, whether expensed or capitalized, the interest component of rental expense and amortization of debt issuance costs.
For information on the ratios of earnings to fixed charges for prior periods, see "Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends" in the accompanying prospectus.
We have summarized certain terms of the notes and the indenture in this section. This summary is not complete. The following description of the particular terms of the notes supplements the description in the accompanying prospectus of the general terms and provisions of the Debt Securities. To the extent that the following description of the notes is inconsistent with that general description in the accompanying prospectus, the following description replaces that in the prospectus. We urge you to read the indenture because it, and not this description, defines your rights as holders of these notes. We have filed copies of the indenture with the SEC.
General
The notes constitute a separate series of securities to be issued pursuant to an indenture dated as of September 19, 1995, between Duke and J.P. Morgan Trust Company, National Association, as trustee, and will initially be limited in aggregate principal amount to $125 million.
The notes will be our direct, unsecured obligations and will rank equal in right of payment with all of our other unsecured and unsubordinated indebtedness from time to time outstanding. The notes will be effectively subordinated to the prior claims of each secured mortgage lender to any specific property of ours which secures such lender's mortgage. The notes will be issued in denominations of $1,000 principal amount and integral multiples of that amount.
The notes will bear interest at 3.35% per year and will mature on January 15, 2008. We will pay interest on the notes in U.S. dollars semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2004. We will pay interest on each interest payment date and on the maturity date to the persons in whose names the notes are registered in the security register applicable to the notes at the close of business 15 calendar days prior to such payment date regardless of whether such day is a business day. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.
We will pay the principal of each note payable upon maturity in U.S. dollars against presentation and surrender of such note at the corporate trust office of the trustee, located initially at 14 Wall
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Street, Eighth Floor, New York, New York. At our option, we may pay interest by check mailed to the address of the person entitled thereto as it appears in the security register or by wire transfer of funds to such person at an account maintained within the United States.
If any interest date or the maturity date falls on a day that is not a business day, the required payment will be made on the next business day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after such interest payment date or such maturity date, as the case may be. For purposes of the indenture, a "business day" is any day, other than a Saturday or Sunday, on which banking institutions in The City of New York are open for business.
The notes are not subject to any sinking fund provisions and are not repayable at the option of any holder prior to maturity.
The section entitled "Description of Debt Securities—Operating Covenants" in the accompanying prospectus describes covenants applicable to the notes. Compliance with these covenants generally may not be waived by the Board of Directors of Duke Realty Corporation, as general partner of Duke, or by the trustee unless the holders of at least a majority in principal amount of all outstanding notes consent to such waiver. However, the defeasance and covenant defeasance provisions of the indenture described under "Description of Debt Securities—Discharge, Defeasance and Covenant Defeasance" in the accompanying prospectus will apply to the notes.
Issuance of Additional Notes
We may, without the consent of the holders, increase the principal amount of the notes by issuing additional notes in the future on the same terms and conditions, except for any differences in the issue price and interest accrued prior to the issue date of the additional notes, and with the same CUSIP number as the notes offered hereby. Any additional notes would rank equally and ratably with the notes offered by this prospectus supplement and would be treated as a single class for all purposes under the indenture.
Optional Redemption
The notes may be redeemed at any time at our option, in whole or in part, at a "Redemption Price" equal to the sum of:
- •
- the principal amount of the notes being redeemed plus accrued interest thereon to the redemption date; and
- •
- the Make-Whole Amount (as defined below), if any, with respect to those notes.
If notice of redemption has been given as provided in the indenture and funds for the redemption of any notes called for redemption have been made available on the redemption date specified in the notice, the notes will cease to bear interest on the date fixed for the redemption specified in the notice and the only right of the holders of the notes from and after the redemption date will be to receive payment of the Redemption Price upon surrender of the notes in accordance with the notice.
Notice of any optional redemption of any notes will be given to holders at their addresses, as shown in the security register, not more than 60 nor less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the Redemption Price and the principal amount of the notes held by the holders to be redeemed.
If less than all the notes are to be redeemed at our option, we will notify the trustee under the indenture at least 45 days prior to the giving of notice of redemption, or such shorter period as may be satisfactory to the trustee, of the aggregate principal amount of the notes to be redeemed and their
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redemption date. The trustee under the indenture will select, in such manner as it deems fair and appropriate, no less than 60 days prior to the date of redemption, the notes to be redeemed in part.
As used in this prospectus supplement "Make-Whole Amount" means, in connection with any optional redemption of any notes, the excess, if any, of:
- •
- the aggregate present value as of the date of redemption of each dollar of principal being redeemed or paid and the amount of interest, exclusive of interest accrued to the date of redemption that would have been payable in respect of each dollar if the redemption had not been made, determined by discounting, on a semi-annual basis (on the basis of a 360-day year consisting of twelve 30-day months), the principal and interest at the Reinvestment Rate (as defined below), determined on the third business day preceding the date notice of the redemption is given, from the respective dates on the principal and interest would have been payable if the redemption had not been made, to the date of redemption; over
- •
- the aggregate principal amount of the notes being redeemed or paid.
"Reinvestment Rate" means 0.15% plus the arithmetic mean of the yields under the headings "Week Ending" published in the most recent Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity of the notes, as of the payment date of the principal being redeemed. If no maturity exactly corresponds to the maturity, yields for the two published maturities most closely corresponding to that maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from those yields on a straight-line basis, rounding each of the relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities or, if the statistical release is not published at the time of any determination of the Make-Whole Amount, then such other reasonably comparable index which shall be designated by us.
Book-Entry System
The notes will be issued as global securities. The Depository Trust Company, or "DTC," will be the depository with respect to the notes. The notes will be issued as fully registered securities in the name of Cede & Co., DTC's partnership nominee, and will be deposited with DTC. DTC will keep a computerized record of its participants (for example, your broker) whose clients have purchased the notes. The participant would then keep a record of its clients who purchased the notes. A global security may not be transferred, except that DTC, its nominees and their successors may transfer an entire global security to one another.
Same-Day Settlement and Payment
The underwriters will pay for the notes in immediately available funds. We will make all payments due on the notes in immediately available funds so long as such notes are in book-entry form.
Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing house or next-day funds. In contrast, the notes will trade in DTC's Same-Day Funds Settlement System until maturity or until the notes are issued in certificated form, and secondary market trading activity in the notes will therefore be required by DTC to settle in immediately available funds. We can give no assurance as to the effect, if any, of settlement in immediately available funds on trading activity in the notes.
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Under the terms and subject to the conditions in the underwriting agreement dated the date of this prospectus supplement, we have agreed to sell to each of the underwriters named below, severally, and each of the underwriters has severally agreed to purchase, the principal amount of the notes set forth opposite its name below:
Underwriter | Principal Amount of Notes | |||
---|---|---|---|---|
Banc of America Securities LLC | $ | 43,750,000 | ||
Merrill Lynch, Pierce, Fenner & Smith Incorporated | $ | 43,750,000 | ||
Banc One Capital Markets, Inc. | $ | 18,750,000 | ||
J.P. Morgan Securities Inc. | $ | 18,750,000 | ||
Total | $ | 125,000,000 | ||
Under the terms and conditions of the underwriting agreement, if the underwriters take any of the notes, then the underwriters are obligated to take and pay for all of the notes.
The notes are a new issue of securities with no established trading market and will not be listed on any national securities exchange. The underwriters have advised us that they intend to make a market for the notes, but they have no obligation to do so and may discontinue market making at any time without providing any notice. No assurance can be given as to the liquidity of any trading market for the notes.
The underwriters have advised us that they initially propose to offer the notes to the public at the initial offering price described on the cover page and part to certain dealers at a price that represents a concession not in excess of 0.30% of the principal amount of the notes. Any underwriter may allow, and any such dealer may reallow, a concession not in excess of 0.125% of the principal amount of the notes to certain other dealers. After commencement of the offering, the underwriters may from time to time vary the offering price and other selling terms.
The following table shows the underwriting discounts and commissions to be paid to the underwriters by us in connection with this offering:
| Paid by Duke | ||||
---|---|---|---|---|---|
Per Note | .50 | % | |||
Total | $ | 625,000 |
We have also agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments which the underwriters may be required to make in respect of any such liabilities.
In connection with the offering of the notes, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the notes. Specifically, the underwriters may overallot in connection with the offering of the notes, creating a syndicate short position. In addition, the underwriters may bid for, and purchase, notes in the open market to cover syndicate short positions or to stabilize the price of the notes. Finally, the underwriting syndicate may reclaim selling concessions allowed for distributing the notes in the offering of the notes, if the syndicate repurchases previously distributed notes in syndicate covering transactions, stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the notes above independent market levels. The underwriters are not required to engage in any of these activities, and may end any of them at any time.
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Expenses associated with this offering, to be paid by us, are estimated to be approximately $150,000.
From time to time, the underwriters and certain of their affiliates have engaged, and may in the future engage, in transactions with, and perform investment banking and/or commercial banking services for, us and our affiliates in the ordinary course of business. J.P. Morgan Securities Inc., one of the underwriters, is an affiliate of J.P. Morgan Trust Company, National Association, which is the trustee under the indenture. In addition, affiliates of Banc of America Securities LLC, Banc One Capital Markets, Inc. and J.P. Morgan Securities Inc. are lenders under our unsecured line of credit and, therefore, will each receive a share of the net proceeds of the offering proportionate to its commitment under the unsecured line of credit. Because more than ten percent of the net proceeds of the offering may be paid to one or more members or affiliates of members of the National Association of Securities Dealers, Inc. participating in the offering, the offering will be conducted in accordance with NASD Conduct Rule 2710(c)(8).
The legality of the notes will be passed on for us by Alston & Bird LLP, Raleigh, North Carolina. Certain legal matters in connection with this offering will be passed upon for the underwriters by Clifford Chance US LLP, New York, New York. Clifford Chance US LLP also acts from time to time as counsel to us in matters unrelated to this offering.
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$125,000,000
3.35% Notes Due 2008
PROSPECTUS SUPPLEMENT
Banc of America Securities LLC
Merrill Lynch & Co.
Banc One Capital Markets, Inc.
JPMorgan
January 13, 2004
TABLE OF CONTENTS
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
DESCRIPTION OF THE NOTES
UNDERWRITING
LEGAL MATTERS