LOCAL Digest

Friday, September 24, 2010

Carlyle-owned firm completes IPO

CoreSite Realty, a Denver-based data center developer owned by the Carlyle Group, raised $270 million after pricing its initial public offering of September at the middle of its forecast range.

The real estate investment trust sold 16.9 million shares at $16 apiece after offering them at $15 to $17 each, according to Bloomberg data and a filing with the Securities and Exchange Commission. CoreSite will use the proceeds to repay debt and develop data center space, while Carlyle, a District-based private equity firm, will retain a 63 percent stake in the REIT's common shares after the IPO.

CoreSite's deal, which was priced at a discount to its publicly traded competitors, is the second of at least 11 U.S. IPOs scheduled for this month after 44 companies postponed or withdrew offerings this year amid concern that the economic recovery was deteriorating.

At the IPO price of $16 a share, CoreSite is valued at 1.4 times its net assets, according to Francis Gaskins, president of IPOdesktop.com. That's at least 26 percent less than the ratios for Digital Realty Trust in San Francisco or District-based DuPont Fabros Technology, operators of data centers that CoreSite listed as competitors in its prospectus, according to data compiled by IPOdesktop.com.

CoreSite shares rose 6 cents to close at $16.01 Thursday.

- Bloomberg News

Washington REIT plans debt buyback

Washington Real Estate Investment Trust said Thursday that it has launched two offers to buy back more than $275 million of senior notes due in 2011 and 2026.

The first cash tender offer covers 5.95 percent senior notes due June 15, 2011, with aggregate principal outstanding of $150 million, to be purchased at $1,037.50 per $1,000 of principal. The second covers 3.875 percent convertible senior notes due Sept. 15, 2026, with aggregate principal of about $125 million, at $1,027.50 per $1,000 of principal.

Washington REIT said the offers hinge on its issuance of at least $250 million in one or more debt financings "on terms reasonably satisfactory" to the company. The offers aren't subject to any minimum tender condition.

Separately, the Rockville-based company said it was launching an underwritten public offering of $250 million in senior unsecured notes due in 2020, made under Washington REIT's shelf registration with the Securities and Exchange Commission. The tender offer for the 2011 notes will expire on Oct. 1 unless extended, while, the other offer will expire Oct. 22, unless extended.

Shares of Washington REIT fell 69 cents, or 2.2 percent, to close at $31.10 on Thursday.

- Associated Press

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