| ITEM 1.01 | ENTRY INTO A MATERIAL AGREEMENT |
On November 14, 2018, Kilroy Realty, L.P. (the “Operating Partnership”) and Kilroy Realty Corporation (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters (the “Underwriters”) listed on Schedule A attached thereto, relating to the public offering by the Operating Partnership of $400,000,000 aggregate principal amount of the Operating Partnership’s 4.750% Senior Notes due 2028 (the “2028 Notes”).
Pursuant to the Underwriting Agreement, the Company has agreed to sell to the several Underwriters, and the Underwriters have severally agreed to purchase, $400,000,000 aggregate principal amount of 2028 Notes. The 2028 Notes will be guaranteed by the Company. The 2028 Notes will pay interest semi-annually at a rate of 4.750% per annum on June 15 and December 15 each year, commencing on June 15, 2019, and mature on December 15, 2028. The public offering price of the 2028 Notes was 99.634% of the principal amount, for a yield to maturity of 4.796%. The offering is expected to close on November 29, 2018, subject to the satisfaction of customary closing conditions.
Net proceeds from the offering will be approximately $395.2 million, after deducting the underwriting discount and the Company’s estimated expenses. The Company intends to allocate an amount equal to the net proceeds from the offering to one or more Eligible Green Projects (as defined), which may include the development or redevelopment of such projects.
Pending the allocation of an amount equal to the net proceeds from the offering to Eligible Green Projects, the Company intends to use the net proceeds to redeem or repay indebtedness and may also hold net proceeds in cash and cash equivalents. Such indebtedness to be redeemed or repaid includes all $250.0 million aggregate principal amount (plus the make-whole premium and accrued and unpaid interest) of the Operating Partnership’s 2020 Notes (defined below) and may include borrowings under the Operating Partnership’s revolving credit facility and term loan facility.
This Current Report on Form8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any jurisdiction in which, or to any person to whom, such offer, solicitation or sale would be unlawful.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by the full text of the Underwriting Agreement, which is being filed as Exhibit 1.1 to this Current Report on Form8-K and is incorporated herein by reference.
| ITEM 7.01 | REGULATION FD DISCLOSURE |
On November 14, 2018, the Company issued a press release announcing that the Operating Partnership has priced the underwritten public offering of the 2028 Notes. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form8-K.
On November 14, 2018, the Company issued a press release announcing that the Operating Partnership is redeeming all of the outstanding $250.0 million aggregate principal amount of the Operating Partnership’s 6.625% Senior Notes due June 1, 2020 (CUSIP No. 49427RAF9) (the “2020 Notes”) in full on December 14, 2018. A copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information included in this Current Report on Form8-K under this Item 7.01 (including Exhibits 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form8-K under this Item 7.01 (including Exhibits 99.1 and 99.2) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
In addition, on November 14, 2018, the Company announced that the Operating Partnership is redeeming all of the outstanding $250.0 million aggregate principal amount of the Operating Partnership’s 6.625% Senior
