Gladstone Commercial (GOOD) Announces Plans to Sell Up To $50M in Senior Common

November 23, 2009 8:51 AM EST

Gladstone Commercial Corporation (NASDAQ: GOOD) announced today that it plans to commence a continuous private offering pursuant to which a dealer manager may enter into agreements with participating broker-dealers whereby the Company may issue a maximum of 3,333,333 shares of its senior common stock at $15.00 per share. The offering of Senior Common Stock will be made on a "best efforts" basis by the Dealer Manager, which means that the participating broker-dealers will only be required to use their best efforts to sell the shares and will have no firm commitment or obligation to purchase any of the shares. The Company will also offer up to 500,000 shares of Senior Common Stock at $15.00 per share pursuant to a distribution reinvestment plan to those purchasers of Senior Common Stock who elect to participate in the plan. The net proceeds from the sale of the Senior Common Stock will be used for investment in additional properties and mortgage loans, to repay indebtedness, to potentially purchase shares of the Company's preferred stock on the open market, or other general corporate purposes.

The Senior Common Stock will be a newly designated class of the Company's common stock that will have priority over its existing common stock, which is listed on the NASDAQ Global Market under the symbol GOOD, with respect to payment of dividends. The dividend rate on the Senior Common Stock will be equal to $1.05 per share per annum, declared daily and paid at the rate of $0.0875 per share per month. The Senior Common Stock will rank equally with the Listed Common Stock with respect to distributions upon liquidation. The Senior Common Stock will be junior to the Company's existing Series A Cumulative Preferred Stock and Series B Cumulative Preferred Stock, with respect to both payment of dividends and distribution upon liquidation. The Senior Common Stock will not be listed or traded on a national securities exchange or listed for quotation on a national market.

The offering is expected to continue until the earlier of the date that the entire $50 million of Senior Common Stock has been sold or November 19, 2011, although the Company's board of directors may elect to extend the offering or terminate the offering earlier. After the fifth anniversary of the completion of the offering, the Senior Common Stock will be callable for redemption for cash at the Company's option, in whole or in part, at a redemption price equal to $15.30 per share, plus accrued and unpaid dividends. In addition, holders of the Senior Common Stock will have the right, but not the obligation, following the fifth anniversary of the issuance of such shares proposed to be exchanged, to exchange any or all of their shares of Senior Common Stock for shares of Listed Common Stock. The exchange ratio will be calculated by dividing $15.00 (the sale price of the Senior Common Stock) by the greater of (i) the highest closing trading price of the Listed Common Stock during the offering period, (ii) the highest book value per share of the Listed Common Stock, as determined during the offering period, and (iii) $13.68.

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