SOURCE: Duke Realty Corporation

Duke Realty Corporation

April 01, 2010 09:00 ET

Duke Realty Corporation Announces Results to Date of Cash Tender Offers

INDIANAPOLIS, IN--(Marketwire - April 1, 2010) -  Duke Realty Corporation (NYSE: DRE), a leading industrial and office property REIT, announced today the expiration and final results of the offer by its operating partnership, Duke Realty Limited Partnership (the "Operating Partnership"), to purchase any and all of its 6.95% Senior Notes due 2011 (the "Any and All Notes"). The Operating Partnership refers to its offer to purchase the Any and All Notes as the "Any and All Tender Offer."

As of 5:00 p.m., New York City time, on March 31, 2010, the expiration date for the Any and All Tender Offer, the aggregate principal amount of the Any and All Notes tendered in the Any and All Tender Offer was $66,349,000, representing 60.94% of the $108,873,000 aggregate principal amount outstanding. All of the Any and All Notes that were tendered have been accepted for payment, with settlement expected to occur today. Payment for the Any and All Notes will come from the proceeds of the Operating Partnership's offering of senior notes, the success of which was a condition to the Any and All Tender Offer and the Maximum Tender Offer (as defined below). That condition has now been satisfied. The holders of the Any and All Notes that were accepted for purchase will be entitled to receive the tender offer consideration of $1,055.00 per $1,000 principal amount of Notes, plus accrued and unpaid interest from and including the last interest payment date (March 15, 2010) to, but not including, the settlement date.

The Any and All Tender Offer was made pursuant to an offer to purchase dated March 24, 2010 (the "Offer to Purchase"), which set forth a complete description of the terms of the Any and All Tender Offer.

The Offer to Purchase also describes an offer by the Operating Partnership to purchase up to the maximum aggregate principal amount of its 5.625% Senior Notes due 2011 (the "5.625% Notes") and its 6.25% Senior Notes due 2013 (the "6.25% Notes") that it can purchase for an amount (excluding Accrued Interest ("Accrued Interest")), equal to $250,000,000 less the payment amount (excluding Accrued Interest) of Any and All Notes repurchased in the Any and All Tender Offer (the "Maximum Payment Amount"), provided that any purchase of the 6.25% Notes will be subject to an aggregate purchase sublimit of $50,000,000 principal amount (subject to increase, the "Level 2 Sublimit"). The Operating Partnership refers to its offer to purchase the Maximum Tender Offer Notes as the "Maximum Tender Offer." 

Based upon the results of the Any and All Tender Offer, the Operating Partnership has set the Maximum Payment Amount for the Maximum Tender Offer as $180,001,805. The Maximum Tender Offer will expire at 11:59 p.m., New York City time, on April 20, 2010 (the "Maximum Tender Offer Expiration Date"), unless extended or earlier terminated.

The following table sets forth some of the terms of the Maximum Tender Offer:

Title of Notes   CUSIP Number   Principal Amount Outstanding   Acceptance Priority
Level
  Tender
Offer Consideration(1)
  Early Tender Premium(1)   Total Consideration (1)(2)
  Maximum Tender Offer                        
    5.625% Senior Notes due 2011   26441YAL1   $218,347,000   1   $1,017.50   $30.00   $1,047.50
    6.25% Senior Notes due 2013(3)   26441YAR8   325,000,000   2   1,037.50   30.00   1,067.50

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(1) Per $1,000 principal amount of Notes tendered.
(2) Includes Early Tender Premium.
(3) Purchase of the 6.25% Notes will be subject to the Level 2 Sublimit, unless increased in our sole discretion.

Holders of Maximum Tender Offer Notes that are validly tendered at or prior to 5:00 p.m., New York City time on April 6, 2010 (as it may be extended, the "Early Tender Date") and accepted for purchase will receive the Tender Offer Consideration for such series set forth in the table above, plus the applicable early tender premium as set forth in the table above (the "Early Tender Premium" and, together with the Tender Offer Consideration, the "Total Consideration"). Holders of Maximum Tender Offer Notes tendered after the Early Tender Date but before the Maximum Tender Offer Expiration Date and accepted for purchase will receive the applicable Tender Offer Consideration, but not the Early Tender Premium.

Payments for Maximum Tender Offer Notes purchased will include accrued and unpaid interest from and including the last interest payment date applicable to the relevant series of Maximum Tender Offer Notes up to, but not including, the settlement date. The settlement date for the Maximum Tender Offer is expected to be one business day following Maximum Tender Offer Expiration Date.

The amount of Maximum Tender Offer Notes that are purchased in the Maximum Tender Offer will be determined in accordance with the priorities identified in the column "Acceptance Priority Level" as set forth in the table above. If the aggregate Total Consideration and Tender Offer Consideration with respect to all Maximum Tender Offer Notes that are validly tendered exceeds the Maximum Payment Amount, the Maximum Tender Offer Notes will be purchased in accordance with the acceptance priority level (in numerical priority order) as set forth in the table above.

Maximum Tender Offer Notes may not be withdrawn from the Maximum Tender Offer after 5:00 p.m., New York City time, on April 6, 2010, unless the Operating Partnership (x) amends the terms of the Maximum Tender Offer to (i) decrease the amount of the applicable Total Consideration or the Tender Offer Consideration or (ii) decrease the applicable maximum aggregate amount of Maximum Tender Offer Notes it is seeking to repurchase or (y) is otherwise required by law to permit withdrawal, in which case withdrawal rights will be extended as the Operating Partnership determines appropriate to allow tendering Holders a reasonable opportunity to respond to such amendment, or as otherwise required by law. In the event of a termination of the Maximum Tender Offer, the Maximum Tender Offer Notes tendered pursuant to the Maximum Tender Offer will be promptly returned.

The complete terms and conditions of the Maximum Tender Offer are set forth in the Offer to Purchase and Letter of Transmittal. Holders are urged to read the Tender Offer documents carefully before making any decision with respect to the Maximum Tender Offer. Copies of the Offer to Purchase and Letter of Transmittal may be obtained from D.F. King & Co., Inc., the depositary and information agent for the tender offers, at (800) 848-3416 (toll-free) or (212) 269-5550 (collect). Questions regarding the tender offers may be directed to Wells Fargo Securities, dealer manager for the tender offers, at (866) 309-6316 (toll-free) or (704) 715-8341 (collect).

This press release is neither an offer to purchase nor a solicitation of an offer to sell any of the securities. The Operating Partnership is making the tender offers only by, and pursuant to the terms of, the Offer to Purchase and the related Letter of Transmittal. The tender offers are not being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. None of the Operating Partnership, Duke Realty Corporation, the depositary and information agent, the dealer manager or the trustee with respect to the securities, or any of our or their respective affiliates, makes any recommendation as to whether holders should tender or refrain from tendering, all or any portion of their securities in response to the tender offers.

Cautionary Notice Regarding Forward-Looking Statements

This news release may contain forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding the company's future financial position, projected financing sources, future transactions with joint venture partners, future dividends, and future performance, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the company, members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should," or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the company's abilities to control or predict. Such factors include, but are not limited to, (i) general adverse economic and local real estate conditions, including the current economic environment; (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms, if at all; (iv) the company's ability to raise capital by selling its assets; (v) changes in governmental laws and regulations; (vi) the level and volatility of interest rates and foreign currency exchange rates; (vii) valuation of joint venture investments, (viii) valuation of marketable securities and other investments; (ix) increases in operating costs; (x) changes in the dividend policy for the company's common stock; (xi) the reduction in the company's income in the event of multiple lease terminations by tenants; and (xii) impairment charges. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company's filings with the Securities and Exchange Commission. The company refers you to the section entitled "Risk Factors" contained in the company's Annual Report on Form 10-K for the year ended December 31, 2009. Copies of each filing may be obtained from the company or the Securities and Exchange Commission.

The risks included here are not exhaustive and undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the company, its management, or persons acting on their behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

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