NORTH BETHESDA, Md., Jan. 8, 2024 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) ("Federal Realty") announced today that on January 8, 2024, its operating partnership, Federal Realty OP LP (the "Partnership"), priced and upsized the previously announced offering (the "Offering") of $425 million aggregate principal amount of 3.25% exchangeable senior notes due 2029 (the "notes") in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Partnership also granted the initial purchasers of the notes an option to purchase up to an additional $60 million aggregate principal amount of notes. The Offering is expected to close on January 11, 2024, subject to customary closing conditions.

The notes will be the Partnership's senior unsecured obligations and will accrue interest payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2024, at a rate of 3.25% per year. The notes will mature on January 15, 2029 (the "Maturity Date"), unless earlier exchanged, purchased or redeemed.

Prior to the close of business on the business day immediately preceding July 15, 2028, the notes will be exchangeable at the option of holders only upon certain circumstances and during certain periods. On or after July 15, 2028, the notes will be exchangeable at the option of the holders at any time prior to the close of business on the second scheduled trading day preceding the Maturity Date. The Partnership will settle exchanges of notes by delivering cash up to the principal amount of the notes exchanged and, in respect of the remainder of the exchange value, if any, in excess thereof, cash or common shares of beneficial interest, par value $.01 per share, of Federal Realty (the "common shares"), or a combination thereof, at the election of the Partnership. The exchange rate will initially equal 8.1436 common shares per $1,000 principal amount of notes (equivalent to an exchange price of approximately $122.80 per common share and an exchange premium of approximately 20% based on the closing price of $102.33 per common share on January 8, 2024). The exchange rate will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.

In the event of a fundamental change (as defined in the indenture that will govern the notes), subject to certain conditions, holders of the notes may require the Partnership to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date (as defined in the indenture that will govern the notes). In addition, if certain fundamental changes occur, the Partnership may be required, in certain circumstances, to increase the exchange rate for any notes exchanged in connection with such fundamental changes by a specified number of common shares.

The Partnership may redeem the notes, at its option, in whole or in part, on any business day on or after January 20, 2027, if the last reported sale price of the common shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Partnership provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Partnership estimates that the net proceeds from the Offering will be approximately $413 million (or approximately $471 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' discount and estimated offering expenses payable by Federal Realty and the Partnership. The Partnership intends to use approximately $17 million of the net proceeds from the Offering to pay the cost of the capped call transactions described below. The Partnership intends to use the remainder of the net proceeds from the Offering for the repayment of indebtedness and for general corporate purposes. Pending such use, the net proceeds may be invested in short-term, income-producing investments or the Partnership may use the net proceeds to temporarily repay current and/or future amounts outstanding under its revolving credit facility. If the initial purchasers of the notes exercise their option to purchase additional notes, the Partnership expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions with the option counterparties and the remaining net proceeds for the purposes described above.

In connection with the pricing of the notes, Federal Realty and the Partnership entered into privately negotiated capped call transactions relating to the notes with one or more of the initial purchasers of the notes or their respective affiliates and/or other financial institutions (the "option counterparties"). The capped call transactions cover, subject to customary adjustments, the number of Federal Realty's common shares that initially underlie the notes.

The cap price of the capped call transactions will initially be approximately $143.26 per share, which represents a premium of approximately 40% over the last reported sale price of Federal Realty's common shares of $102.33 on the New York Stock Exchange on January 8, 2024, and is subject to certain adjustments under the terms of the capped call transactions.

The capped call transactions are expected generally to reduce the potential dilution to Federal Realty's common shares upon exchange of any notes and/or offset any cash payments the Partnership is required to make in excess of the principal amount of exchanged notes, as the case may be, with such reduction and/or offset subject to a cap.

In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates may enter into various derivative transactions with respect to Federal Realty's common shares and/or purchase Federal Realty's common shares or other securities of Federal Realty in secondary market transactions concurrently with or shortly after the pricing of the notes, including with or from, as the case may be, certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of Federal Realty's common shares or the notes at that time.

In addition, the option counterparties or their respective affiliates may modify or unwind their hedge positions by entering into or unwinding various derivatives with respect to Federal Realty's common shares and/or purchasing or selling Federal Realty's common shares or other securities of Federal Realty or the Partnership in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so following any fundamental change repurchase, redemption or early exchange of the notes and during the 40 trading day period beginning on the 41^st scheduled trading day prior to the maturity date of the notes, or, to the extent the Partnership exercises the relevant election under the capped call transactions, following any other repurchase of the notes). This activity could also cause, reduce the extent of or avoid an increase or a decrease in the market price of Federal Realty's common shares or the notes, which could affect a noteholder's ability to exchange the notes, and, to the extent the activity occurs following exchange or during any observation period related to an exchange of notes, it could affect the number of common shares, if any, and value of the consideration that noteholders will receive upon exchange of the notes.

Neither the notes nor the common shares issuable upon exchange of the notes have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. Accordingly, the notes are being offered and sold only to persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the Securities Act).

This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any offer or sale of, the notes in any jurisdiction in which the offer, solicitation or sale of the notes would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of terms such as "propose," "will," "expect," "shall," and similar terms or the negative of such terms, and include, without limitation, statements regarding the closing of the Offering, the initial purchasers' option to purchase additional notes, the expected use of the net proceeds of the Offering, and other information that is not historical information. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include risks and uncertainties related to closing of the Offering on the anticipated terms or at all, market conditions, and the satisfaction of customary closing conditions related to the Offering. More information about the risks and uncertainties faced by Federal Realty and the Partnership is contained in the section captioned "Risk Factors" in Federal Realty's and the Partnership's Securities and Exchange Commission ("SEC") filings, including their Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as subsequent SEC filings. The forward-looking statements contained in this release are as of the date of this release, and, except as required by law, neither Federal Realty nor the Partnership undertakes any obligation to update any such statements, whether as a result of new information, future events or otherwise.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 102 properties include approximately 3,300 tenants, in approximately 26 million square feet, and approximately 3,100 residential units.

Federal Realty has increased its quarterly dividends per common share for 56 consecutive years on an annualized basis, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT.

Investor Inquiries:			Media Inquiries:
Leah Andress Brady			Brenda Pomar
Vice President, Investor Relations			Senior Director, Corporate Communications
301.998.8265			301.998.8316
lbrady@federalrealty.com			bpomar@federalrealty.com

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SOURCE Federal Realty Investment Trust

Federal Realty Announces Upsized Pricing of $425 Million of Exchangeable Senior Notes