Terms Agreement dated June 17, 2019, among ERP Operating Limited Partnership and each of J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and U.S. Bancorp Investments, Inc
Exhibit 1.1
Execution Version
ERP OPERATING LIMITED PARTNERSHIP
(an Illinois limited partnership)
$600,000,000 3.000% Notes due 2029
TERMS AGREEMENT
Dated: June 17, 2019
| To: | ERP Operating Limited Partnership |
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 3.000% Notes due 2029 (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.
| Underwriter | Aggregate Principal Amount of Underwritten Securities to be Purchased | |||
| J.P. Morgan Securities LLC | $ | 85,500,000 | ||
| Morgan Stanley & Co. LLC | $ | 85,500,000 | ||
| RBC Capital Markets, LLC | $ | 85,500,000 | ||
| U.S. Bancorp Investments, Inc. | $ | 85,500,000 | ||
| Barclays Capital Inc. | $ | 85,500,000 | ||
| PNC Capital Markets LLC | $ | 30,000,000 | ||
| Scotia Capital (USA) Inc. | $ | 30,000,000 | ||
| SunTrust Robinson Humphrey, Inc. | $ | 30,000,000 | ||
| Fifth Third Securities, Inc. | $ | 16,500,000 | ||
| MUFG Securities Americas Inc. | $ | 16,500,000 | ||
| Samuel A. Ramirez & Company, Inc. | $ | 16,500,000 | ||
| SMBC Nikko Securities America, Inc. | $ | 16,500,000 | ||
| TD Securities (USA) LLC | $ | 16,500,000 | ||
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| Total | $ | 600,000,000 | ||
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The Underwritten Securities shall have the following terms:
| Title: | 3.000% Notes due 2029 | |
| Principal Amount to be Issued: | $600,000,000 aggregate principal amount | |
| Currency: | U.S. Dollars | |
| Expected Ratings: | • A3 by Moody’s Investors Service, Inc. • A- by Standard & Poor’s Ratings Services • A by Fitch Ratings Services | |
| Form: | Registered book-entry form | |
| Price to Public: | 99.580% of the principal amount | |
| Purchase Price: | 98.930% of the principal amount | |
| Stated Maturity Date: | July 1, 2029 | |
| Interest Rate: | 3.000% per annum | |
| Interest Payment Date: | Interest on the Underwritten Securities will be payable semi-annually in arrears, on January 1 and July 1 of each year beginning January 1, 2020 | |
| Record Dates: | The close of business on the December 15 and June 15 preceding the applicable Interest Payment Date | |
| Redemption: | Prior to April 1, 2029 (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 April 1, 2029 (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 | |
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| redeemed plus accrued interest thereon to 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 April 1, 2029, 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 | |
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| Supplemental 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 June 26, 2019, at 10:00 a.m. New York City time at the offices of Morrison & Foerster LLP; 2000 Pennsylvania Avenue, NW, Suite 6000, Washington, DC 20006-1888; delivery of funds on June 26, 2019, in accordance with DTC procedures for the Underwritten Securities | |
| Address for Notices to Underwriters: | J.P. Morgan Securities LLC 383 Madison Avenue New York, New York 10179
Morgan Stanley & Co. LLC 1585 Broadway New York, New York 10036
RBC Capital Markets, LLC Three World Financial Center 200 Vesey Street, 10th Floor New York, New York 10281
U.S. Bancorp Investments, Inc. 214 N. Tryon St. 26th Floor Charlotte, North Carolina 28202 | |
All the provisions contained in the document attached as Annex A hereto entitled “ERP Operating Limited Partnership—Debt Securities—Standard Underwriting Provisions” dated June 17, 2019 (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 2:51 p.m. on the date hereof.
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 June 17, 2019, 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.
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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 p.m. (New York City time) on June 17, 2019, by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
| J.P. MORGAN SECURITIES LLC | ||
| By: | /s/ Som Bhattacharyya | |
| Name: Som Bhattacharyya Title: Executive Director | ||
| MORGAN STANLEY & CO. LLC | ||
| By: | /s/ Jason J. Occi | |
| Name: Jason J. Occi Title: Executive Director | ||
| RBC CAPITAL MARKETS, LLC | ||
| By: | /s/ Scott G. Primrose | |
| Name: Scott G. Primrose Title: Authorized Signatory | ||
| 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
| 3.000% Notes due 2029 | ||
| Issuer: | ERP Operating Limited Partnership | |
| Security: | 3.000% Notes due 2029 | |
| Anticipated Ratings*: | A3 by Moody’s Investors Service, Inc. A- by Standard & Poor’s Ratings Services A by Fitch Ratings Services | |
| Principal Amount Offered: | $600,000,000 | |
| Trade Date: | June 17, 2019 | |
| Settlement Date: | June 26, 2019 (T+7) | |
| Maturity Date: | July 1, 2029 | |
| Coupon: | 3.000% | |
| Interest Payment Dates: | Payable semiannually on January 1 and July 1, commencing January 1, 2020 | |
| Price to Public: | 99.580% | |
| Benchmark Treasury: | 2.375% May 15, 2029 | |
| Benchmark Treasury Price and Yield: | 102-20+ / 2.079% | |
| Spread to Benchmark Treasury: | +97 basis points | |
| Re-Offer Yield: | 3.049% | |
| 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 April 1, 2029 (the date that is 3 months prior to the maturity date of the notes), the redemption price will not include the Make-Whole Amount | |
| Net Proceeds: | $593,580,000 | |
| Day Count Convention: | 30 / 360 | |
| Denominations: | $1,000 and integral multiples of $1,000 in excess thereof | |
| CUSIP / ISIN: | 26884ABL6 / US26884ABL61 | |
| Joint Book-Running Managers: | J.P. Morgan Securities LLC Morgan Stanley & Co. LLC RBC Capital Markets, LLC U.S. Bancorp Investments, Inc. Barclays Capital Inc. | |
| Senior Co-Managers: | PNC Capital Markets LLC Scotia Capital (USA) Inc. SunTrust Robinson Humphrey, Inc. | |
| Co-Managers: | Fifth Third Securities, Inc. MUFG Securities Americas Inc. Samuel A. Ramirez & Company, Inc. SMBC Nikko Securities America, Inc. TD Securities (USA) LLC | |
*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 J.P. Morgan Securities LLC collect at ###-###-####, Morgan Stanley & Co. LLC at ###-###-####, RBC Capital Markets, LLC at ###-###-#### or U.S. Bancorp Investments, Inc. at ###-###-####.
