Realty Income prices $875M convertible senior notes due 2031

Realty Income Corporation (NYSE: O) priced an $875.0 million offering of 3.750% convertible senior notes due 2031, according to a company press release. The offering was increased from an initially announced size of $750.0 million.

The notes, offered privately to qualified institutional buyers under Rule 144A, are scheduled to settle on Aug. 14, 2026. Realty Income also granted initial purchasers an option to buy up to an additional $125.0 million in notes within 13 days of issuance.

The notes carry an interest rate of 3.750% per annum, payable semi-annually beginning Feb. 15, 2027, and mature on Aug. 15, 2031. The initial conversion rate is 13.7512 shares per $1,000 principal amount, representing a conversion price of approximately $72.72 per share — a 17.5% premium over the Aug. 11, 2026 closing price of $61.89 per share.

Realty Income estimates net proceeds of approximately $859.0 million, or roughly $981.9 million if the overallotment option is fully exercised. The company plans to use approximately $29.1 million for capped call transactions and $188.7 million to repurchase approximately 3.0 million shares of its common stock in privately negotiated transactions. The remainder is earmarked for general corporate purposes, including potential debt repayment, property acquisitions, and hedging instruments.

In connection with the offering, Realty Income entered into capped call transactions intended to reduce potential dilution upon note conversion. The cap price on these transactions is approximately $83.55 per share, representing a 35.0% premium over the Aug. 11, 2026 closing price.

Realty Income may not redeem the notes before Aug. 20, 2029, except in cases of a cleanup redemption or a REIT preservation redemption. After that date, redemption is permitted if the stock price exceeds 130% of the conversion price for a specified period.

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