BEACHWOOD, Ohio, June 29, 2011 /PRNewswire/ -- Developers
Diversified Realty Corporation (NYSE: DDR) ("DDR") announced today
that it has refinanced its existing $550
million senior secured term loan, scheduled to mature on
February 20, 2012, with a new
$500 million senior secured term loan
arranged by KeyBanc Capital Markets and J.P. Morgan Securities LLC.
The new term loan has a 39-month term with an additional 12-month
extension option. Pricing on the new term loan is currently set at
LIBOR plus 170 basis points and is determined based upon DDR's
credit ratings from Moody's and S&P. The term loan bank group
consists of 21 institutions, including four new participants.
DDR has entered into an interest rate swap contract to fix LIBOR
at 1.01% per annum on $100 million of
the new term loan through June
2014.
Simultaneously with refinancing the term loan, DDR amended its
two senior unsecured revolving credit facilities that had
previously closed in October 2010.
The unsecured revolving credit facility, arranged by J.P. Morgan
Securities LLC and Wells Fargo Securities, LLC, was amended to
extend the term by two additional years to February 28, 2016, to reduce pricing and fees,
and to modify certain covenants. Consistent with DDR's previously
stated objective to lower its reliance on short-term floating rate
debt, the Company elected to reduce the size of the facility from
$950 million to $750 million. The
amended facility contains an accordion feature that provides for
$1.25 billion of total capacity. DDR
also amended its $65 million
unsecured revolving credit facility, provided solely by PNC Bank,
National Association, to match the amended terms of the larger
facility.
The pricing grid on both new revolving credit facilities has
been reduced, and pricing is currently set at LIBOR plus 165 basis
points, which is a decrease of 110 basis points from the previous
rate, and is determined based upon DDR's credit ratings from
Moody's and S&P. Further, the facility fee has been reduced
from 50 basis points to 35 basis points. The covenants on the
amended facilities have been adjusted and the capitalization rate
used to value assets has been lowered.
David Oakes, DDR's Chief
Financial Officer, stated, "We are very pleased to refinance the
term loan ahead of schedule, at terms that exceeded our
expectations. This refinancing represents a final step in balancing
our overall maturity profile while also addressing our largest
single maturity in 2012. Moreover, the amendment and extension of
our revolving credit facility highlights the continued improvement
in the market's perception of our financial stability. We very much
appreciate the support of our bank group in closing both of these
significant transactions."
Daniel B. Hurwitz, DDR's
President and Chief Executive Officer commented, "While
opportunistic financing activity will remain a strategic focus,
these transactions mark a formal improvement in our long-term cost
of capital, while reducing our reliance on short-term bank
borrowings and meaningfully accelerating the completion of our
recapitalization efforts. The successful execution of these
transactions, combined with our ability to generate capital
proceeds through asset sales, provides us greater flexibility to
pursue strategic growth initiatives without the need to issue
additional shares of common stock."
About DDR
DDR owns and manages approximately 520 retail properties in 41
states, Puerto Rico and
Brazil totaling approximately 127
million square feet. The Company's prime portfolio primarily
features open-air, value-oriented shopping centers in high
barrier-to-entry markets with stable populations and high growth
potential. DDR is the largest landlord in Puerto Rico and owns a premier portfolio of
regional malls primarily clustered around Sao Paulo, Brazil. DDR is a self-administered
and self-managed REIT operating as a fully integrated real estate
company. Additional information about DDR is available on the
Company's website at www.ddr.com.
SOURCE Developers Diversified Realty Corporation