Terms Agreement dated September 9, 2024, among ERP Operating Limited Partnership and each of Barclays Capital Inc., BofA Securities, Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and U.S. Bancorp Investments, Inc
Exhibit 1.1
EXECUTION VERSION
ERP OPERATING LIMITED PARTNERSHIP
(an Illinois limited partnership)
$600,000,000 4.650% Notes due September 15, 2034
TERMS AGREEMENT
Dated: September 9, 2024
To: ERP Operating Limited Partnership
c/o Equity Residential
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Robert Garechana
Ladies and Gentlemen:
We (the “Representatives”) understand that ERP Operating Limited Partnership, an Illinois limited partnership (“ERP”), proposes to issue and sell $600,000,000 aggregate principal amount of 4.650% Notes due September 15, 2034 (the “Underwritten Securities”). Subject to the terms and conditions set forth or incorporated by reference herein, the Underwriters named below (the “Underwriters”) severally, and not jointly, agree to purchase the respective amounts of the Underwritten Securities set forth below opposite their respective names, at the purchase price set forth below.
| Aggregate Principal Amount of Underwritten Securities to
|
Barclays Capital Inc.. | $82,800,000 |
BofA Securities, Inc. | $82,800,000 |
Deutsche Bank Securities Inc. | $82,800,000 |
Morgan Stanley & Co. LLC | $82,800,000 |
U.S. Bancorp Investments, Inc. | $82,800,000 |
Loop Capital Markets LLC | $30,000,000 |
Mizuho Securities USA LLC | $30,000,000 |
Scotia Capital (USA) Inc. | $30,000,000 |
TD Securities (USA) LLC | $30,000,000 |
Truist Securities, Inc. | $30,000,000 |
BMO Capital Markets Corp. | $13,500,000 |
BNY Mellon Capital Markets, LLC | $13,500,000 |
Samuel A. Ramirez & Company, Inc. | $9,000,000 |
Total | $600,000,000 |
The Underwritten Securities shall have the following terms:
Title: | 4.650% Notes due September 15, 2034
|
Principal Amount to be Issued:
| $600,000,000 aggregate principal amount
|
Currency: | U.S. Dollars
|
Expected Ratings: | ▪ A3 by Moody’s Investors Service, Inc.
|
Form: | Registered book-entry form
|
Price to Public: | 99.659% of the principal amount
|
Purchase Price: | 99.009% of the principal amount
|
Stated Maturity Date: | September 15, 2034
|
Interest Rate:
| 4.650% per annum |
Interest Payment Date: | Interest on the Underwritten Securities will be payable semi‑annually in arrears, on March 15 and September 15 of each year beginning March 15, 2025
|
Record Dates: | The close of business on the March 1 and September 1 preceding the applicable Interest Payment Date
|
Redemption: | Prior to June 15, 2034 (the date that is three months prior to the maturity date of the Underwritten Securities), ERP may redeem the Underwritten Securities, at any time, in whole or, from time to time, in part, at the election of ERP, at a redemption price equal to the sum of (i) the principal amount of the Underwritten Securities being redeemed plus accrued interest thereon to the redemption date and (ii) the Make‑Whole Amount (as defined in the Prospectus, including the Reinvestment Rate set forth below), if any, with respect to the Underwritten Securities. On or after June 15, 2034 (the date that is three months prior to the maturity date of the Underwritten Securities), ERP may redeem the Underwritten Securities, at any time, in whole, or, from time to time, in part, at the election of ERP at a redemption price equal to 100% of the principal amount of the Underwritten Securities being redeemed plus accrued interest thereon to |
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| the redemption date. Notice of any optional redemption of any Underwritten Securities will be given to holders at their addresses, as shown in the security register, not more than 45 nor less than 15 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the redemption price and the principal amount of the Underwritten Securities held by such persons to be redeemed
|
Reinvestment Rate: | “Reinvestment Rate” means 0.150% plus the yield under the heading “Week Ending” published in the most recent Statistical Release (as defined in the Prospectus) under the caption “Treasury Constant Maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as if the maturity date of the Underwritten Securities was June 15, 2034, as of the payment date of the principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used
|
Sinking Fund Requirements: | None
|
Listing: | None
|
Delayed Contracts: | Not authorized
|
Restrictive Covenants:
| The covenants set forth in the Indenture, dated as of October 1, 1994, between ERP and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.) (as successor to J.P. Morgan Trust Company, National Association, as successor to Bank One Trust Company, NA, as successor to The First National Bank of Chicago) (the “Trustee”), as amended by the First Supplemental Indenture, dated as of September 9, 2004, between ERP and the Trustee, by the Second Supplemental Indenture, dated as of August 23, 2006, between ERP and the Trustee, by the Third Supplemental Indenture, dated as of June 4, 2007, between ERP and the Trustee, by the Fourth Supplemental |
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| Indenture, dated as of December 12, 2011, between ERP and the Trustee, and by the Fifth Supplemental Indenture, dated as of February 1, 2016, between ERP and the Trustee (as so amended and as may be further amended and supplemented from time to time, the “Indenture”)
|
Settlement Date, Time and Place: | Delivery of documents on September 11, 2024, at 10:00 a.m. New York City time at the offices of Morrison & Foerster LLP; 2100 L Street, NW, Suite 900, Washington, DC 20037; delivery of funds on September 11, 2024, in accordance with DTC procedures for the Underwritten Securities
|
Address for Notices to Underwriters: | Barclays Capital Inc. BofA Securities, Inc. Deutsche Bank Securities Inc. Morgan Stanley & Co. LLC U.S. Bancorp Investments, Inc. |
All the provisions contained in the document attached as Annex A hereto entitled “ERP Operating Limited Partnership—Debt Securities—Standard Underwriting Provisions” dated September 9, 2024 (the “Standard Underwriting Provisions”) are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined.
For purposes of this transaction, the term “Time of Sale” as used in the Standard Underwriting Provisions and this Terms Agreement shall mean 2:15 p.m. New York City time on the date hereof.
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The Time of Sale Information for this transaction shall constitute the following: (1) any scheduled Issuer Free Writing Prospectuses attached as Annex B hereto, (2) the Preliminary Prospectus Supplement dated September 9, 2024, together with the Base Prospectus and (3) any filing under the 1934 Act which is deemed incorporated by reference in the Registration Statement, the Preliminary Prospectus Supplement or the Base Prospectus.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between ERP and the several Underwriters, or any of them, with respect to the offer and sale of the Underwritten Securities.
[SIGNATURE PAGE APPEARS NEXT]
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Please accept this offer no later than 6:00 p.m. (New York City time) on September 9, 2024, by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
BARCLAYS CAPITAL INC.
By: /s/ Kenneth Chang
Name: Kenneth Chang
Title: MD
BOFA SECURITIES, INC.
By: /s/ Kevin King
Name: Kevin King
Title: Managing Director
DEUTSCHE BANK SECURITIES INC.
By: /s/ Kevin Prior
Name: Kevin Prior
Title: Managing Director
By: /s/ Shamit Saha
Name: Shamit Saha
Title: Director
MORGAN STANLEY & CO. LLC
By: /s/ Andrew Pocius
Name: Andrew Pocius
Title: Managing Director
U.S. BANCORP INVESTMENTS, INC.
By: /s/ Charles P. Carpenter
Name: Charles P. Carpenter
Title: Senior Vice President
Acting on behalf of themselves and the other named Underwriters
Accepted:
ERP OPERATING LIMITED PARTNERSHIP
By: EQUITY RESIDENTIAL, not individually but as General Partner
By: /s/ Robert A. Garechana
Name: Robert A. Garechana
Title: Executive Vice President and Chief Financial Officer
Annex A
ERP Operating Limited Partnership
Debt Securities
Standard Underwriting Provisions
Annex B
Issuer Free Writing Prospectus
PRICING TERM SHEET
4.650% Notes due September 15, 2034 | |
Issuer: | ERP Operating Limited Partnership |
Security: | 4.650% Notes due September 15, 2034 |
Expected Ratings*: | A3 by Moody’s Investors Service, Inc. A- by Standard & Poor’s Ratings Services |
Principal Amount Offered: | $600,000,000 |
Trade Date: | September 9, 2024 |
Settlement Date: | September 11, 2024 (T+2) |
Maturity Date: | September 15, 2034 |
Coupon: | 4.650% |
Interest Payment Dates: | Payable semiannually on March 15 and September 15, commencing March 15, 2025 |
Price to Public: | 99.659% |
Benchmark Treasury: | 3.875% UST due August 15, 2034 |
Benchmark Treasury Price and Yield: | 101-16 / 3.693% |
Spread to Benchmark Treasury: | +100 basis points |
Re-Offer Yield: | 4.693% |
Make-Whole Call: | Treasury rate plus 15 basis points |
Optional Redemption: | Issuer may redeem at any time in whole or, from time to time in part, at a redemption price equal to the sum of (i) the principal amount being redeemed plus accrued interest thereon to the redemption date and (ii) the Make-Whole Amount (as described in the Prospectus), if any; provided, that if the notes are redeemed on or after June 15, 2034 (the date that is three months prior to the maturity date of the notes), the redemption price will not include the Make-Whole Amount |
Net Proceeds Before Expenses: | $594,054,000 |
Day Count Convention: | 30 / 360 |
Denominations: | $1,000 and integral multiples of $1,000 in excess thereof |
CUSIP / ISIN: | 26884A BP7 / US26884ABP75 |
Joint Book-Running Managers: | Barclays Capital Inc. BofA Securities, Inc. Deutsche Bank Securities Inc. Morgan Stanley & Co. LLC U.S. Bancorp Investments, Inc.
|
Senior Co-Managers: | Loop Capital Markets LLC
|
Co-Managers: | BMO Capital Markets Corp.
|
*Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The issuer has filed a registration statement including a prospectus and a prospectus supplement with the Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the prospectus and prospectus supplement in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering.
You may obtain these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and the prospectus supplement if you request them by calling Barclays Capital Inc. at ###-###-####, BofA Securities, Inc. at ###-###-####, Deutsche Bank Securities Inc. at ###-###-####, Morgan Stanley & Co. LLC at ###-###-#### or U.S. Bancorp Investments, Inc. at ###-###-####.
