Macerich Announces Pricing of $800 Million of 3.25% Convertible Senior Notes Due 2012
March 13 2007 - 2:00AM
PR Newswire (US)
SANTA MONICA, Calif., March 12 /PRNewswire-FirstCall/ -- The
Macerich Company (NYSE:MAC) today announced that it has upsized and
priced an offering of $800 million aggregate principal amount of
3.25% convertible senior notes due 2012. The Company also has
granted to the initial purchasers an over-allotment option to
purchase up to an additional $150 million aggregate principal
amount of notes. The notes will be senior unsecured obligations of
The Macerich Company and will be guaranteed by its operating
partnership, The Macerich Partnership, L.P. The notes will pay
interest semiannually at a rate of 3.25% per annum and mature on
March 15, 2012. Prior to the close of business on the business day
prior to December 15, 2011, upon the occurrence of specified
events, the notes will be convertible at the option of the holder
into cash, shares of the common stock of the Company or a
combination of cash and shares of the common stock of the Company,
at the election of the Company, at an initial conversion rate of
8.9702 shares per $1,000 principal amount of notes. The initial
conversion price of approximately $111.48 represents a 20% premium
to the closing price of the Company's common stock on March 12,
2007. On and after December 15, 2011, the notes will be convertible
at any time prior to the close of business on the second business
day preceding the maturity date of the notes at the option of the
holder into cash, shares of common stock of the Company or a
combination of cash and shares of common stock of the Company, at
the election of the Company, at the initial conversion rate. The
initial conversion rate is subject to adjustment in certain
circumstances. The notes will not be redeemable at the Company's
option, except to preserve the Company's status as a REIT. In that
case, the Company may redeem all of the notes at a redemption price
equal to the principal amount plus accrued and unpaid interest
(including liquidated damages, if any). Holders of notes will not
have the right to require the Company to repurchase their notes
prior to maturity except in connection with the occurrence of
certain fundamental change transactions. The Company has entered
into capped call transactions with affiliates of the initial
purchasers of the notes. These agreements effectively increase the
conversion price of the notes to approximately $130.06, which
represents a 40% premium to the March 12, 2007 closing price of
$92.90 per common share of the Company. The cost of these
agreements will be approximately $50.4 million (assuming no
exercise by the initial purchasers of their over-allotment option)
and is recorded as a charge in the stockholders equity section of
the Company's balance sheet. In connection with hedging the capped
call transactions, the counterparties have advised the Company that
they or their respective affiliates expect to enter into various
derivative transactions with respect to the Company's common stock
concurrently with or shortly after the pricing of the notes and may
enter into or unwind various derivatives and/or purchase or sell
the Company's common stock in secondary market transactions
following the pricing of the notes (including during the cash
settlement averaging period for the notes). These activities could
have the effect of increasing or preventing a decline in the price
of the Company's common stock concurrently with or following the
pricing of the notes. The estimated net proceeds from the sale of
the notes will be approximately $732.6 million (assuming no
exercise by the initial purchasers of their over-allotment option),
after deducting the initial purchasers' discounts and commissions
and our estimated offering expenses (including the cost of the
capped call transactions). The Company intends to use the net
proceeds to repay outstanding debt. Closing of the sale of the
notes is expected to occur on March 16, 2007. The notes and the
related guarantee will be sold to qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933. The
notes, the related guarantee and the Company's common shares
issuable upon conversion of the notes have not been registered
under the Securities Act of 1933, or any state securities laws, and
unless so registered, may not be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act of 1933 and applicable state
laws. This release shall not constitute an offer to sell or the
solicitation of an offer to buy any of these securities, nor shall
it constitute an offer, solicitation or sale in any jurisdiction in
which such offer, solicitation or sale is unlawful. DATASOURCE: The
Macerich Company CONTACT: Edward Coppola, Senior Executive Vice
President and Chief Investment Officer, +1-972-385-9858, or Thomas
E. O'Hern, Executive Vice President and Chief Financial Officer,
+1-310-394-6000, both of The Macerich Company
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