Essential Properties stock falls on $450M debt offering plan

Investing.com -- Essential Properties Realty Trust Inc (NYSE: EPRT) shares fell 4.7% in premarket trading Tuesday after the company announced plans to issue $450 million in exchangeable senior notes due 2032.

The company’s operating partnership, Essential Properties, L.P., intends to offer the notes in a private placement to qualified institutional buyers. Essential Properties Realty Trust will fully and unconditionally guarantee the notes on a senior, unsecured basis.

The notes will be senior, unsecured obligations and will accrue interest payable semi-annually beginning July 15, 2027, with a maturity date of January 15, 2032. Noteholders will have the right to exchange their notes in certain circumstances, with the operating partnership settling exchanges by paying cash up to the principal amount and, if applicable, paying or delivering cash or shares of the company’s common stock or a combination thereof.

The operating partnership intends to use the net proceeds to fund capped call transactions and to reduce amounts outstanding under its revolving credit facility. The initial purchasers will have an option to purchase up to an additional $67.5 million aggregate principal amount of notes.

The notes will be redeemable at the operating partnership’s option starting January 21, 2030, but only if the last reported sale price per share of the company’s common stock exceeds 130% of the exchange price for a specified period and certain other conditions are satisfied.

Essential Properties Realty Trust is an internally managed REIT that acquires and manages primarily single-tenant properties net leased on a long-term basis. As of September 30, 2026, the company’s portfolio consisted of 2,580 freestanding net lease properties with a weighted average lease term of 14.2 years.

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