Northstar Realty Finance Corp (NYSE:NRF) announced it has priced for sale 60 million shares of its common stock. Of those 60 million shares, 40 million are subject to a forward sales agreement and all have been priced at $18.65 per share. There is also an attachment granting the underwriters a 30-day extension allowing the purchase of an additional 9 million shares.
The Northstar Realty Finance Corp (NYSE:NRF) entered into a forward sale agreement with Deutche Bank Securities that allows Deutche to borrow and sell 40 million of the company’s common shares. This also allows Northstar to determine whether they want to be compensated in cash or via a net share settlement. Should the underwriters exceed the allotted number of shares to be sold it has the option to increase the amount based on the total amount of shares borrowed and sold in the original action and the exercising of the option for an additional 9 million shares. The remaining shares will be offered by the company will be newly issued and added to the float.
The forwards sale agreement is set to be settled within six months of the prospectus filing date and the execution of the agreement should also occur within that same period. The company intends to use the proceeds to for general corporate purposes. These include funding the acquisition of a European office portfolio that contains 11 Class A office properties that are situated in seven gateway cities in Europe’s top markets. This is along with the purchase of a $600 million portfolio that comprises 38 properties stretched across eight countries. They also intend to repay some debt including the outstanding credit facility issued to them by Deutche Bank AG in New York which is due in August of 2017. Northstar is a REIT that is managed by its parent, Northstar Asset management Group, which is a global asset management firm.
The pricing of the common stock offering caused the stock to drop to its current level at $18.48. Until the offering is completed and the new shares digested, this level should hold strong.