Cousins Properties Incorporated (NYSE:CUZ), a real estate investment trust, announced today that it has entered into a significant financial transaction. The company's operating partnership, Cousins Properties LP, issued $500 million in aggregate principal amount of 5.875% Senior Notes due on October 1, 2034.
The issuance was made under an indenture dated May 8, 2024, and a first supplemental indenture dated today. The notes, guaranteed by Cousins Properties Inc ., will pay interest semi-annually starting April 1, 2025.
The indenture includes covenants limiting the company's and its subsidiaries' ability to incur debt and to merge or sell assets, with several exceptions. The company is also required to maintain a minimum level of unencumbered assets relative to unsecured debt.
Cousins Properties LP may redeem the notes before July 1, 2034, at a price greater than the principal amount or a make-whole premium. After that date, the redemption price will be the principal amount plus accrued interest.
The proceeds from the notes will go towards repaying loans under its credit facility and for general corporate purposes, which may include repaying other outstanding debt.
The notes were offered through a prospectus supplement filed with the Securities and Exchange Commission. This financial move comes as part of the company's broader strategy to manage its capital structure and liquidity.
In other recent news, Cousins Properties has showcased strong growth in its second quarter, reporting robust financial results. The company recorded funds from operations (FFO) of $0.68 per share and a 5% increase in same-property net operating income. Notably, leasing activity was a highlight, with 391,000 square feet leased and an 18.2% positive cash rent rollup.
Baird and Jefferies, in their recent analyses, adjusted their price targets for Cousins Properties to $31 and $27 from $29 and $24 respectively. Baird maintained an Outperform rating, highlighting the company's robust balance sheet and active pursuit of strategic acquisitions.
Jefferies retained a Hold rating, noting the impact of two new mezzanine investments on the projected higher net operating income.
In addition to these developments, Cousins Properties has reduced leverage and acquired two mezzanine loans in Nashville and Charlotte. The company anticipates stable or increased reported occupancy by year-end, buoyed by a strong leasing pipeline.
Despite negative net absorption in the Phoenix market, Cousins Properties reported positive leasing activity across several markets, including Atlanta and Charlotte.
InvestingPro Insights
In light of Cousins Properties Incorporated's recent financial transaction, current metrics from InvestingPro reveal a nuanced picture of the company's market position. Cousins Properties, with a market capitalization of $4.14 billion, is trading at a high earnings multiple, with a P/E ratio of approximately 69.87. This indicates that the market has high expectations for the company's future earnings growth. Despite a modest revenue growth of 2.53% over the last twelve months as of Q2 2024, the company has maintained a solid gross profit margin of 67.08%, underscoring its ability to manage costs effectively.
An InvestingPro Tip worth noting is that Cousins Properties has upheld a commendable track record of dividend payments for 45 consecutive years, which is particularly attractive to income-focused investors. The current dividend yield stands at 4.7%, as of the last dividend ex-date on July 3, 2024. Additionally, the company is trading near its 52-week high, with the price at 97.07% of this peak, reflecting strong investor confidence and a robust return over the last three months of 15.54%.
For those considering an investment in Cousins Properties, it may be beneficial to explore the full suite of InvestingPro Tips, which includes further insights into the company's financial health and market performance. There are a total of 7 additional tips listed on InvestingPro for Cousins Properties, which can be accessed for a deeper analysis.
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