Welltower Inc. announced that on July 8, 2024 its operating company, Welltower OP LLC ("Welltower OP"), priced and upsized the previously announced offering (the "Offering") of $900 million aggregate principal amount of 3.125% exchangeable senior notes due 2029 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Welltower OP also granted the initial purchasers of the notes an option to purchase up to an additional $135 million aggregate principal amount of notes. The Offering is expected to close on July 11, 2024, subject to customary closing conditions.

The notes will be Welltower OP's senior unsecured obligations and will accrue interest payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2025, at a rate of 3.125% per year. The notes will mature on July 15, 2029 (the "Maturity Date"), unless earlier exchanged, purchased or redeemed. The Company will fully and unconditionally guarantee the notes on a senior unsecured basis.

Prior to the close of business on the business day immediately preceding January 15, 2029, the notes will be exchangeable at the option of holders only upon certain circumstances and during certain periods. On or after January 15, 2029, the notes will be exchangeable at the option of the holders at any time prior to the close of business on the scheduled trading day immediately preceding the Maturity Date. Welltower OP will settle exchanges of notes by delivering cash up to the principal amount of the notes exchanged and, in respect of the remainder of the exchange value, if any, in excess thereof, cash or shares of common stock, par value $1.00 per share, of the Company (the "Common Stock"), or a combination thereof, at the election of Welltower OP.

The exchange rate will initially equal 7.8177 shares of Common Stock per $1,000 principal amount of notes (equivalent to an exchange price of approximately $127.91 per share of Common Stock and an exchange premium of approximately 22.5% based on the closing price of $104.42 per share of Common Stock on July 8, 2024). The exchange rate will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. If a fundamental change (as defined in the indenture that will govern the convertible notes), subject to certain conditions, holders of the notes may require Welltower OP to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date (as defined in the indenture that will govern the convertible notes).

In addition, if certain fundamental changes occur, Welltower OP may be required, in certain circumstances, to increase the exchange rate for any notes converted in connection with such fundamental changes by a specified number of shares of its common stock. Welltower OP may redeem the notes, at its option, in whole or in part, on any business day on or after July 20, 2027, if the last reported sale price of the Common Stock has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Welltower OP provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Welltower OP estimates that the net proceeds from the offering will be approximately $882.3 million (or approximately $1,015.0 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' discount and estimated offering expenses payable by the Company and Welltower OP. Welltower OP intends to use the net proceeds from the Offering for general corporate purposes, which may include the repayment or redemption of debt (which may include the 4.000% Notes due June 1, 2025) and investment in health care, wellness and seniors housing properties. Pending such use, the net proceeds may be invested in short-term, investment grade, interest-bearing securities, certificates of deposit or indirect or guaranteed obligations of the United States.

Neither the notes nor the shares of Common Stock issuable upon exchange of the notes have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. Accordingly, the notes are being offered and sold only to persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the Securities Act).