"These refinancings are part of our strategy to reduce exposure to floating rate debt and place permanent loans on our centers," says executive vice president and chief financial officer Lisa A. Payne. "These two transactions reduce Taubman's share of floating rate debt by nearly $120 million. In addition, we are pleased to lock in attractive interest rates and to receive excess proceeds from both these non-recourse financings."
The $192-million International Plaza refinancing has a five-year term with interest at 4.27%. Proceeds were used to pay off the $188-million outstanding balance of the floating rate construction loan on the center, and the excess proceeds were distributed to partners. Taubman developed International Plaza, a 1.3-million-sf shopping center that opened in September 2001. Dillard's, Lord & Taylor, Neiman Marcus and Nordstrom are anchors.
The $135-million loan on Sunvalley carries a 10-year term and an interest rate of 5.71%. The proceeds were used to pay off $110 million of senior floating debt and $10 million of mezzanine debt previously encumbering the center. Excess proceeds of $12 million were distributed to the partners in the property. Taubman Centers received $6 million, having purchased a 50% interest in Sunvalley in May 2002. JCPenney, two Macy's and Sears anchor the 1.3-million-sf center.
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