BEACHWOOD, Ohio, Jan. 31, 2012 /PRNewswire/ -- DDR Corp. (NYSE: DDR) announced today that it has closed $353 million of new long-term financings, comprised of a $250 million unsecured term loan ("Term Loan") and a $103 million mortgage loan ("Mortgage Loan"). These financings address the majority of the company's 2012 consolidated debt maturities and improve debt duration, which further reduces the company's risk profile.
Proceeds from the Term Loan will be used to retire $184 million of convertible notes maturing in March 2012, reduce the outstanding balances under the Company's revolving credit facilities, and for general corporate purposes. DDR's remaining 2012 consolidated unsecured debt maturities consist of $223 million of unsecured notes that mature in October 2012, and the company has no other unsecured maturities in the next three years. Upon funding of the recently closed transactions, DDR will have nearly full availability on its revolving credit facilities, which have a final maturity in 2016.
Pricing on the Term Loan is set at LIBOR plus a margin that is determined based upon DDR's long-term unsecured debt ratings. The Term Loan consists of a $200 million tranche that initially bears interest at an annual rate of LIBOR plus 210 basis points and matures on January 31, 2019; and a $50 million tranche that initially bears interest at an annual rate of LIBOR plus 170 basis points and matures on January 31, 2017. DDR has entered into interest rate swap contracts which will fix LIBOR on the $200 million tranche. Based on the Company's current credit rating, that will result in a total rate of 3.64% for the $200 million tranche.
Wells Fargo Securities, LLC and PNC Capital Markets, LLC acted as joint lead arrangers for the Term Loan; with Wells Fargo Bank, National Association as Administration Agent and PNC Bank, National Association as Syndication Agent. Capital One served as Documentation Agent. Regions Bank, RBS Citizens, First Tennessee, Goldman Sachs and Citigroup also participated in the Term Loan.
The Mortgage Loan is a $103 million seven-year loan with Principal Real Estate Investors LLC and is secured by three prime shopping centers located in Atlanta, Georgia; Princeton, New Jersey; and San Antonio, Texas. Interest is fixed for the term at 3.4% and the loan proceeds will be used to pre-fund all of the Company's consolidated 2012 mortgage maturities.
"We are pleased to announce these new long-term loans that, combined with our recent equity issuance, address most of our 2012 maturities in the first month of the year. The attractive interest rate and duration further our goals of lowering our corporate risk profile and long-term cost of capital," said David J. Oakes, chief financial officer of DDR. "We very much appreciate the support of our lender group in closing these significant transactions as we capitalize on the favorable access to capital and pricing available to us."
DDR is an owner and manager of 538 value-oriented shopping centers representing 134 million square feet in 41 states, Puerto Rico and Brazil. The company's assets are concentrated in high barrier-to-entry markets with stable populations and high growth potential and its portfolio is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR. Additional information about the company is available at www.ddr.com.
DDR considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to sell assets on commercially reasonable terms; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; our ability to continue to pay dividends on our common shares at the current or higher rates; and the finalization of the financial statements for the three-month period and year ended December 31, 2011. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's Form 10-K for the year ended December 31, 2010. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
SOURCE DDR Corp.