Developers Diversified Realty Announces Pricing of $305 Million of Convertible Senior Notes Due 2040

BEACHWOOD, Ohio, Nov. 2, 2010 /PRNewswire-FirstCall/ -- Developers Diversified Realty Corporation (NYSE: DDR) announced today it priced its underwritten public offering of $305 million aggregate principal amount of convertible senior notes due 2040.  

The notes will pay interest semiannually at a rate of 1.75% per annum and mature on November 15, 2040. The notes will have an initial conversion rate of 61.0361 per $1,000 principal amount of the notes, representing a conversion price of approximately $16.38 per common share and a conversion premium of approximately 27.5% based on the Company closing share price of $12.85 per common share on November 1, 2010. The initial conversion rate is subject to adjustment under certain circumstances.  

The Company may redeem the notes anytime on or after November 20, 2015 in whole or in part for cash equal to 100% of the principal amount of the notes plus accrued and unpaid interest to but excluding the redemption date. Holders may require the Company to repurchase notes in whole or in part for cash at 100% of the principal amount plus accrued and unpaid interest, up to but excluding the repurchase date, on November 15, 2015; November 15, 2020; November 15, 2025; November 15, 2030; and November 15, 2035, as well as following the occurrence of certain change of control transactions. Additionally, the holders of the notes may convert the notes upon the occurrence of specified events, as well as anytime during the period beginning on May 15, 2040 through the second business day preceding the maturity date. In these instances, the principal amount of the notes will be converted into cash and the remainder, if any, of the conversion value in excess of such principal amount will be converted into cash, the Company's common shares or a combination thereof (at the Company's election).

Developers Diversified expects to use the net proceeds from the offering to reduce balances on its corporate revolving credit facilities and for general corporate purposes.

J.P. Morgan Securities LLC, Goldman, Sachs & Co., Deutsche Bank Securities Inc. and UBS Securities LLC served as joint book-running managers, KeyBanc Capital Markets Inc., RBC Capital Markets Corporation, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc. served as senior co-managers, and Daiwa Capital Markets America Inc., FBR Capital Markets & Co., ING Financial Markets LLC and RBS Securities Inc. served as co-managers.

This release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and is effective.

A prospectus supplement and accompanying prospectus relating to this offering will be filed with the Securities and Exchange Commission. A copy of the final prospectus supplement and accompanying prospectus relating to this offering may be obtained, when available, from: J.P. Morgan Securities LLC, Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or at 1-866-803-9204; or from Goldman, Sachs & Co., Attention Prospectus Department, 200 West Street, New York, New York 10282, or at (212) 902-1171 or toll-free (866) 471-2526 or by emailing [email protected]; or from Deutsche Bank Securities Inc., 100 Plaza One, Second Floor, Jersey City, NJ 07311, or at 1-800-503-4611; or from UBS Securities LLC, Prospectus Department, 299 Park Avenue, New York, NY 10171 or at 1-888-827-7275.

Developers Diversified owns and manages approximately 590 retail operating and development properties in 41 states, Brazil, Canada and Puerto Rico. Totaling more than 134 million square feet, Developers Diversified's shopping center portfolio features open-air, value-oriented neighborhood and community centers, mixed-use centers and lifestyle centers located in prime markets with stable populations and high-growth potential. Developers Diversified is the largest landlord in Puerto Rico and owns a premier portfolio of regional malls in and around Sao Paulo, Brazil. Developers Diversified is a self-administered and self-managed REIT operating as a fully integrated real estate company.

Cautionary Note on Forward-Looking Statements

Developers Diversified considers portions of this 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 with respect to Developers Diversified's expectation for future periods.  Although Developers Diversified 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; Developers Diversified's ability to sell assets on commercially reasonable terms; Developers Diversified's 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; the finalization of the financial statements for the three-month period ended September 30, 2010; and Developers Diversified's ability to successfully complete this public offering due to market conditions or any other reason. For additional factors that could cause Developers Diversified's results to differ materially from those indicated in the forward-looking statements, please refer to Developers Diversified's Annual Report on Form 10-K for the year ended December 31, 2009. Developers Diversified undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

SOURCE Developers Diversified Realty Corporation