Boston Properties (BXP) Prices $1B Bond In Green Financing

Displaying its commitment to sustainability strategy, Boston Properties, Inc. (NYSE:BXP) recently announced that the company's operating partnership, Boston Properties Limited Partnership (“BPLP”), will issue unsecured notes worth $1 billion in a public offering underwriting to raise nearly $988.1 million in net proceeds.

Specifically, the 4.5% senior notes are priced at 99.641% of the principal amount. The notes are due on Dec 1, 2028, and carry an early redemption feature. The offering, subject to fulfillment of customary closing conditions, is expected to close on Nov 28, 2018.

The operating partnership intends to use the net proceeds from this offering to finance and refinance its recently-completed, as well as prospective green projects. Notably, BPLP owns and manages more than 20 million square feet of green building projects which have received the highest LEED Gold and LEED Platinum level certifications.

In fact, capital raised from this issuance will be used to redeem the 5.875% senior notes that are slated to mature on Oct 15, 2019. In addition, proceeds will be utilized to pay off the company’s outstanding debt under its unsecured revolving line of credit. Remaining funds will likely be invested in short-term, interest-bearing, investment-grade securities.

Nevertheless, BPLP anticipates to record a loss due to early extinguishment of the 2019 notes in fourth-quarter 2018. Furthermore, this was not considered n the company’s guidance for 2018 and 2019 earnings.

Boston Properties expects 2018 funds from operations (FFO) per share to be $6.39-$6.41. For full-year 2019, it had provided FFO per share guidance to $6.75-$6.92, indicating 7% year-on-year growth at the mid-point.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have outperformed the industry it belongs to. In fact, its shares have rallied 6.3% compared with the industry’s gain of 5.8% during the same time frame.

Stocks to Consider

A few better-ranked stocks from the REIT space are Iron Mountain Incorporated (NYSE:IRM) , Cousins Properties (NYSE:CUZ) and Alexandria Real Estate Equities, Inc. (NYSE:ARE) . All three stocks carry a Zacks Rank of 2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Iron Mountain’s FFO per share estimates for 2018 remained unchanged at $2.13 in 30 days’ time. The stock has gained 2.1% in a month’s time.

Cousins Properties’ Zacks Consensus Estimate for 2018 FFO per share has been revised upward marginally to 62 cents in the last month. Its shares have inched up 0.1% over the past month.

Alexandria’s Zacks Consensus Estimate for the current-year FFO per share remained unchanged at $6.61 in the last month. Its shares have inched up 0.3% in the past month.

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