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01/25/2005

iStar Financial Announces Offer to Exchange its 5.70% Series B Senior Notes due 2014 for TriNet Corporate Realty Trust 7.70% Senior Notes due 2017

NEW YORK, Jan. 25 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI), the leading publicly traded finance company focused on the commercial real estate industry, announced today that it has commenced a consent solicitation and offer to exchange iStar Financial Inc. 5.70% Series B Senior Notes due 2014 for any and all outstanding TriNet Corporate Realty Trust 7.70% Senior Notes due 2017, based upon an exchange ratio calculation described below. A holder's tender of TriNet Notes will constitute a consent to amend the indenture relating to the TriNet Notes to eliminate or waive most of the restrictive covenants and to amend some of the events of default governing the TriNet Notes.

Catherine D. Rice, chief financial officer commented, "Exchanging iStar Notes for TriNet Notes is a step forward in our efforts to simplify our corporate structure and eliminate ongoing costs associated with the separate reporting requirements resulting from the TriNet Notes being outstanding."

For each $1,000 principal amount of TriNet Notes tendered, holders will receive iStar Notes in an amount equal to $1,000 multiplied by the exchange ratio. The exchange ratio is equal to the exchange price of the TriNet Notes, which includes accrued and unpaid interest, divided by the new issue price of the iStar Notes, which includes accrued and unpaid interest. Since the iStar Notes will be issued in denominations of $1,000, the exchange ratio calculation will be rounded down to the nearest $1,000 principal amount, with the balance payable in cash.

The exchange price of the TriNet Notes will equal: (1) the discounted value of the remaining payments of principal and interest on $1,000 principal amount of TriNet Notes through their maturity date at a discount rate equal to: (a) the bid-side yield to maturity on the 4.25% U.S. Treasury Note maturing November 15, 2014, as calculated by Bear, Stearns & Co. Inc., at 2:00 p.m. New York City time on February 22, 2005 (unless the expiration date of the exchange is extended); plus (b) a fixed spread of 160 basis points.

In order to encourage eligible holders to tender early, the exchange price of the TriNet Notes includes a consent amount of $20.00 per $1,000 principal amount. The consent amount is only offered to eligible holders who validly tender their TriNet Notes on or prior to 5:00 p.m. New York City time on the consent date of February 8, 2005 and do not validly withdraw their tenders on or before that date. The consent amount of $20.00 per $1,000 principal amount will be deducted from the exchange price of the TriNet Notes with regard to TriNet Notes tendered after the consent date.

The new issue price of the iStar Notes will equal: (1) the discounted value of the remaining payments of principal and interest on $1,000 principal amount of iStar Notes through their maturity date at a discount rate equal to: (a) the bid-side yield to maturity on the 4.25% U.S. Treasury Note maturing November 15, 2014, as calculated by Bear, Stearns & Co. Inc. at 2:00 p.m. New York City time on February 22, 2005 (unless the expiration date of the exchange is extended); plus (b) a fixed spread of 125 basis points.

Based upon the yield of the 4.25% U.S. Treasury Note maturing November 15, 2014 at 11:00 am New York City time on January 24, 2005, the exchange price of the TriNet Notes, inclusive of the consent amount, and the new issue price of the iStar Notes would have been $1,181.66, and $1,021.88, respectively, and the exchange ratio would have been 1.156359. Excluding payment of the consent amount, the exchange price of the TriNet Notes would have been $1,161.66 and the exchange ratio would have been 1.136787.

iStar Financial's obligation to exchange notes that are tendered will be subject to customary conditions, including that at least a majority in principal amount of the TriNet Notes are properly tendered and not validly withdrawn. iStar Financial has the right to waive these and the other conditions.

The indenture amendments relating to the TriNet Notes will become effective if holders of a majority in principal amount of the TriNet Notes tender their TriNet Notes and do not withdraw them before a supplemental indenture relating to the amendments is executed. To the extent iStar Financial Inc. receives the requisite consents, we expect to enter into a supplemental indenture giving effect to the proposed amendments on the consent date. However, the amendments will not become operative until iStar Financial accepts and consummates the exchange of all notes validly tendered. If the amendments with regard to the TriNet Notes become operative, they will be effective as of the date the supplemental indenture was executed.

Holders who tender TriNet Notes will be able to withdraw them until the supplemental indenture relating to the TriNet Notes is executed. If we do not receive notes and related consents from a majority in aggregate principal amount of TriNet Notes, but nonetheless decide to accept the notes of that issue that have been tendered, withdrawal rights with respect to the TriNet Notes will end at the expiration time of the offer.

iStar Financial has engaged Bear, Stearns & Co Inc. to act as dealer manager in connection with the exchange offer. Questions regarding the exchange offer may be directed to Bear, Stearns & Co. Inc., Global Liability Management Group, at (877) 696-BEAR (2327) (U.S. toll-free).

Copies of the Prospectus and the Letter of Transmittal and Consent form can be obtained from Georgeson Shareholder at 17 State Street, 10th Floor, New York, NY 10004, by telephone at (866) 873-6993.

iStar Financial is the leading publicly traded finance company focused on the commercial real estate industry. The Company provides custom-tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing the highest quality financing solutions to its customers. Additional information on iStar Financial is available on the Company's website at http://www.istarfinancial.com.

SOURCE iStar Financial Inc.
01/25/2005
CONTACT: Catherine D. Rice, Chief Financial Officer, or Andrew C.
Richardson, Executive Vice President - Capital Markets, or Andrew G. Backman,
Vice President - Investor Relations, all for iStar Financial Inc.,
+1-212-930-9400
Web site: http://www.istarfinancial.com
(SFI)

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