REALTY INCOME CORP 8-K

What Happened

• Realty Income Corporation (O) announced on January 8, 2026 that it issued $862,500,000 principal amount of 3.500% Convertible Senior Notes due January 15, 2029. The notes were issued under an indenture with The Bank of New York Mellon Trust Company as trustee and were sold pursuant to Rule 144A to persons believed to be qualified institutional buyers. The initial purchasers exercised their option in full, so the $862.5M includes an additional $112.5M of notes.

Key Details

• Principal amount issued: $862,500,000 (includes $112,500,000 from full exercise of purchaser option).
• Coupon and payments: 3.500% per year, paid semi‑annually on Jan 15 and Jul 15, starting July 15, 2026.
• Maturity: January 15, 2029 (earlier repurchase, redemption or conversion possible).
• Conversion terms: initial conversion rate 14.4051 shares per $1,000 principal (≈ $69.42 per share conversion price); conversions settled in cash and, if applicable, shares; cash payment will cover at least the principal amount based on a 20‑trading‑day Observation Period.
• Subordination and priority: senior unsecured obligations equal in right of payment to other senior unsecured debt, effectively subordinated to secured debt to the extent of collateral, and structurally subordinated to liabilities of subsidiaries.
• Other protections/rights: noteholders have repurchase rights on certain Fundamental Changes; Company may redeem to preserve REIT tax status at principal plus accrued interest; Events of Default and acceleration provisions are included in customary form.

Why It Matters

• This issuance raises near‑term liquidity of $862.5M and adds a fixed 3.50% annual interest obligation through 2029. The notes are convertible into common stock at a defined rate, which means future conversions could dilute existing shareholders or result in cash settlement depending on the conversion mechanics. The debt ranks as senior unsecured and is subject to subordination to secured creditors and to liabilities of subsidiaries, which affects recovery priority in downside scenarios. The offering was to institutional buyers under Rule 144A and the company filed a press release announcing the closing.