PREIT Strengthens Balance Sheet With $646 Million in Financings

PHILADELPHIA, June 30, 2015 /PRNewswire/ -- PREIT (NYSE: PEI) has entered into a modification and extension of its $400 million unsecured Revolving Credit Facility ("Amended 2013 Revolving Facility") and a new Term Loan ("2015 5-Year Term Loan")  offering increased flexibility and reduced rates to help fund the Company's growth objectives.  The Amended 2013 Revolving Facility replaces the 2013 Revolving Facility.

Key terms of the Amended 2013 Revolving Facility are:

• The available amount is $400 million and includes an accordion feature up to $600 million.
• The initial term is three years and the Company has the right to two one-year extension options.
• The amounts borrowed will bear interest at a rate of LIBOR plus a range of 120 to 155 basis points depending upon the Company's leverage, representing a reduction ranging from 30-50 basis points from the 2013 Revolving Facility.
  • Initially, borrowings will be at a rate of LIBOR plus 125 basis points.
• The capitalization rates used to calculate Gross Asset Value are as follows:
  • 6.5% for properties with sales per square foot of more than $500
  • 7.5% for all other properties

Key terms of the 2015 5-Year Term Loan are:

• The available amount is $150 million.
• The term is 5 years.
• The amounts borrowed will bear interest at a rate of LIBOR plus a range of 135 to 190 basis points depending upon the Company's leverage.
  • Initially, borrowings will be at a rate of LIBOR plus 145 basis points.
  • Proceeds from the 2015 5-Year Term Loan were used to repay $150 million of the outstanding balance under the 2013 Revolving Facility.

The covenants for the two agreements remain materially unchanged with the following exception:

• The unencumbered debt yield, which establishes the Company's maximum unsecured borrowing capacity, will be reduced from 12% to 11%, reflecting the improved quality of the Company's pool of unencumbered assets. 
•  In addition to this, the Company's existing 2014 Term Loans were amended to reflect this revised unencumbered debt yield covenant.

In addition to these two significant transactions, the Company entered into a 10-year, non-recourse mortgage loan secured by Patrick Henry Mall in Newport News, VA.  The loan amount is $96.2 million and carries an interest rate of 4.352%, replacing mortgage loan balances of $84.4 million carrying an interest rate of 6.34%.

"We are happy that conditions in the debt market and our improved portfolio have allowed us to execute these favorable transactions that will reduce our interest expense, ladder our debt maturities and provide the flexibility to fund growth initiatives," said Joseph F. Coradino, CEO of PREIT.  "These transactions enable us to execute on the high quality, value-creating redevelopment opportunities in our pipeline, allowing us to naturally de-lever."

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 owns and operates 28.5 million square feet of space in properties in 12 states in the eastern half of the United States with concentration in the Mid-Atlantic region and Greater Philadelphia.  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 preit.com or on Twitter or LinkedIn.

CONTACT:
AT THE COMPANY
Robert McCadden
EVP & CFO
(215) 875-0735

Heather Crowell
VP, Corporate Communications and Investor Relations
(215) 454-1241
[email protected]

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SOURCE PREIT

Related Links

http://www.preit.com