On November 28, 2018, Boston Properties, Inc.’s operating partnership, Boston Properties Limited Partnership (the “Company”), completed the issuance and sale of $1.0 billion aggregate principal amount of the Company’s 4.500% Senior Notes due 2028 (the “Notes”) pursuant to an underwriting agreement dated November 13, 2018 (the “Underwriting Agreement”), by and among the Company and Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, as managers of the several underwriters named in Schedule II thereto (the “Underwriters”), whereby the Company agreed to sell and the Underwriters agreed to purchase from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement, the Notes.
The net proceeds to the Company from the sale of the Notes, after deducting underwriting discounts and estimated transaction expenses, are estimated to be approximately $988.1 million. The Company intends to allocate an amount equal to the net proceeds from the offering to the financing and refinancing of recently completed and future eligible green projects (as such term is defined in the Prospectus Supplement, defined below) in the United States, including the Salesforce Tower development project in San Francisco, California, which has received LEED Platinum certification. The Company expects to allocate all of the net proceeds from the offering to previously incurred development costs relating to the Salesforce Tower development project and other eligible green projects. Net proceeds allocated to previously incurred costs associated with eligible green projects will be available for repayment of debt or other uses. The Company intends to initially use the net proceeds from the offering for the repayment of debt, including funding the redemption of the $700.0 million aggregate principal amount of its 5.875% senior notes due 2019 (the “2019 Notes”) that are outstanding and, for any net proceeds from the offering not used to fund the redemption of the 2019 Notes, repaying borrowings outstanding under the Company’s unsecured revolving line of credit.
The Company has elected to redeem the 2019 Notes on December 13, 2018 (the “Redemption Date”). The redemption price for the 2019 Notes will equal the sum of (i) the greater of (a) 100% of the principal amount of the 2019 Notes redeemed or (b) the present values as of the Redemption Date of the remaining scheduled payments of principal and interest to maturity (excluding any accrued and unpaid interest) discounted on a semi-annual basis at a rate equal to the yield to maturity of a comparable United States Treasury security plus 0.40%, plus (ii) accrued and unpaid interest to, but excluding, the Redemption Date. The redemption price will be calculated three business days prior to the Redemption Date and will be payable on December 13, 2018 in accordance with the terms of the 2019 Notes. In connection with the redemption of the 2019 Notes, the Company expects that it will record a loss from early extinguishment of debt in the fourth quarter of 2018.
The Notes were issued under the indenture, dated as of December 13, 2002, between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York Mellon, formerly known as The Bank of New York), as supplemented by Supplemental Indenture No. 18 (“Supplemental Indenture No. 18”) dated as of November 28, 2018.
The offer and sale of the Notes were registered with the Securities and Exchange Commission (the “Commission”) pursuant to a registration statement on FormS-3 (FileNo. 333-218460-01) (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”). The material terms of the Notes are described in a prospectus supplement filed by the Company with the Commission on November 14, 2018 pursuant to Rule 424(b)(5) under the Securities Act (the “Prospectus Supplement”).
Copies of the Underwriting Agreement, Supplemental Indenture No. 18 and the form of the Notes are attached hereto as Exhibit 1.1, Exhibit 4.1 and Exhibit 4.2, respectively, and are incorporated herein by reference. The foregoing summaries do not purport to be complete and are qualified in their entirety by reference to the Underwriting Agreement, Supplemental Indenture No. 18 and the form of the Notes.
Additionally, in connection with the filing of the Underwriting Agreement, the Company is filing the opinion and consent of its counsel, Goodwin Procter LLP, regarding the legality of the securities being registered as Exhibits 5.1 and 23.1 hereto, respectively, which are incorporated by reference into the Registration Statement.
