Brandywine Gains After $250 Million Debt Offer

PHILADELPHIA (AP) — Shares of Brandywine Realty Trust advanced Tuesday after the company improved its cash position by raising $250 million in unsecured debt.

Brandywine said the offering of senior unsecured guaranteed notes carry a 7.5 percent interest rate and will be due in May 2015. Interest is payable twice a year, on May 15 and Nov. 15. Payments will start next May.

The debt is priced at 99.412 percent, with a yield to maturity of 7.625 percent — a spread of 5.162 percent to the August 2014 Treasury note at the time of pricing. Brandywine expects to net $247 million from the offering and the money will be used to repay existing debt from an unsecured revolving credit line and for general corporate uses.

The sale of the notes will close on Friday. Joint book-running managers are Bank of America Merrill Lynch, J.P. Morgan, Wells Fargo Securities and RBS Securities.

UBS analyst Ross Nussbaum said the new debt carries a "solid" yield, which compares well with its other debt due 2014 with an interest rate of 5.4 percent and yields in the low 8 percent range. Bond investors compare yields when they're investing in debt.