Developers Diversified Realty Corp - Current report filing (8-K)
March 31 2008 - 4:15PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 25, 2008
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(Exact name of registrant as specified in its charter)
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Ohio
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1-11690
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34-1723097
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3300 Enterprise Parkway, Beachwood, Ohio
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44122
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(216) 755-5500
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
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On March 25, 2008, subsidiaries of the Company entered into six identical mortgage loans (the
Loan Agreements) with Metropolitan Life Insurance Company on six of its shopping center assets,
four of which are located in the continental U.S. and two of which are located in Puerto Rico. The
subsidiaries of the Company borrowed an aggregate of $350,000,000 and the loans will mature on
April 1, 2013. The loans are cross-defaulted. The loans have a fixed interest rate of 5.0% and
provide for interest-only debt service payments with a balloon payment at maturity. The Company
will pay accrued interest on the first day of each calendar month, at maturity of the loan (whether
upon acceleration or otherwise) and upon termination of the loans. The loans may not be prepaid
prior to the first day of the thirty-first month following the funding of the loans. Thereafter,
the loans may be prepaid subject to payment of a prepayment fee. The prepayment fee will be an
amount equal to the greater of (A) the Prepayment Ratio (as hereinafter defined) multiplied by the
difference between (x) and (y), where (x) is the present value of all remaining payments of
principal and interest on the applicable promissory note including the outstanding principal of the
promissory note due on the maturity date, discounted at the rate which, when compounded monthly, is
equivalent to the interest rate on U.S. Treasury securities with a maturity equal to the remaining
term of the applicable note plus 25 basis points compounded semi-annually, and (y) is the amount of
the principal of the note then outstanding, or (B) 0.5% of the amount of the principal of the note
being prepaid. The Prepayment Ratio is a fraction, the numerator of which is the amount of
principal of the note being prepaid, and the denominator of which is the principal amount of the
note then outstanding. A prepayment of a loan also may require an additional partial release
payment on loans related to other properties which are cross defaulted.
The Loan Agreements contain customary representations, warranties and covenants and events of
default upon which amounts due can be accelerated by the lenders. The Loan Agreements contain
covenants restricting, subject to certain exceptions, the subsidiarys ability to sell the
applicable property, incur indebtedness and liens and merge or consolidate with other
companies.
The Company used the proceeds from the loans to replace scheduled debt maturities and the
balance to repay revolving credit facilities.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Developers Diversified Realty Corporation
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(Registrant)
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Date
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March 31, 2008
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/s/ William H. Schafer
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William H. Schafer
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Executive Vice President and Chief Financial Officer
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