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CHICAGO-Equity Office Properties Trust has announced that EOP Operating Limited Partnership has issued $1 billion of senior unsecured notes. The notes issue included the following tranches:

* $400 million of 7.375% notes due 2003 at an all-in cost of 7.6%;

* $600 million of 7.750% notes due 2007 at an all-in cost of 7.9%

Total proceeds to the company, net of selling commissions, are about $991.2 million. Proceeds will be used to pay down borrowings under the company’s existing credit facilities. The securities have been rated Baa1 by Moody’s and BBB+ by Standard & Poor’s and Fitch.

According to Richard D. Kincaid, chief financial officer of Equity Office, “This offering allows us to pay off the bridge credit facility incurred from our Cornerstone merger as well as to reduce our line of credit to zero.”

For the three-year notes due in 2003, Morgan Stanley Dean Witter and Goldman, Sachs & Co. served as joint lead underwriters. For the seven-year notes due in 2007, Morgan Stanley Dean Witter and UBS Warburg are the joint lead underwriters.

Both offerings shared the same co-managers: Bank of America Securities LLC, Chase Securities Inc., Lehman Brothers, Merrill Lynch & Co. and Salomon Smith Barney.

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