PHILADELPHIA, Jan. 9, 2014 /PRNewswire/ -- Pennsylvania Real Estate Investment Trust (PREIT/NYSE: PEI) has entered into two unsecured term loans for an aggregate amount of $250.0 million, comprised of a $150.0 million, 5 Year Term Loan and a $100.0 million, 7 Year Term Loan (collectively "2014 Term Loans").
Key provisions of the 2014 Term Loans:
- The loan covenants mirror those under the Company's 2013 Revolving Facility.
- The amounts borrowed under the 5 Year Term Loan will bear interest at a rate of LIBOR plus a range of 135 to 190 basis points depending upon the Company's leverage, initially LIBOR plus 1.45%.
- The amounts borrowed under the 7 Year Term Loan will bear interest at a rate of LIBOR plus a range of 180 to 235 basis points depending upon the Company's leverage, initially LIBOR plus 1.95%.
- The loans include a deferred draw feature that allows the Company to borrow amounts in increments over a one-year period.
The Company made initial borrowings of $100.0 million under the 5 Year Term Loan and $30.0 million under the 7 Year Term Loan, and used the proceeds to repay the $130.0 million outstanding balance under its 2013 Revolving Facility. In connection with these borrowings, PREIT Associates entered into hedging transactions that effectively fix the initial rate on $100.0 million of the 5 Year Term Loan at 3.24% for five years and that effectively fix the initial rate on $30.0 million of the 7 Year Term Loan at 3.73% for five years. These rates are inclusive of the initial LIBOR spread based on the Company's current leverage ratio.
"This transaction is an opportunistic measure reflective of PREIT's financial strength," said Joseph F. Coradino, CEO of PREIT. "These new term loans provide access to unsecured funds at attractive pricing, extend our maturities and increase our liquidity position allowing for flexibility in funding our long term capital needs."
About Pennsylvania Real Estate Investment Trust
PREIT is a real estate investment trust specializing in the ownership and management of differentiated retail shopping malls designed to fit the dynamic communities they serve. Founded in 1960 as Pennsylvania Real Estate Investment Trust, the Company now operates properties in 12 states in the eastern half of the United States with concentration in the Mid-Atlantic region and Greater Philadelphia. The Company's current portfolio is comprised of 35 shopping malls, five community and power centers, and three development sites totaling 43 properties and 30.3 million square feet of space. PREIT is headquartered in Philadelphia, Pennsylvania, and is publicly traded on the NYSE under the symbol PEI. Information about the Company can be found at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt and stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2013 Revolving Facility and 2014 Term Loans; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short- and long-term liquidity position; current economic conditions and their effect on employment and consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; the effects of online shopping and other uses of technology on our retail tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. The risks included here are non-exhaustive, and there are additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in the section of our Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013 in the section entitled "Item 1A. Risk Factors." We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
CONTACT: AT THE COMPANY Robert McCadden EVP & CFO (215) 875-0735
Heather Crowell VP, Corporate Communications and Investor Relations (215) 875-0735
SOURCE Pennsylvania Real Estate Investment Trust