GlobeSt.com UPDATE: Regency Settles Big Chunk of Stock Sale With Citigroup

JACKSONVILLE, FL-Regency Centers Corp. has settled 3.78 million shares of the 4.31 million shares of common stock related to the forward sale the shopping center developer made with Citigroup in March.

Regency used the stock sale proceeds of about $175 million to pay off its remaining debt on the $2.74-billion February joint venture acquisition of 101 centers from CalPERS/First Washington, as GlobeSt.com previously reported.

In a prepared statement, Regency says the $175 million was used to redeem $30 million of Series E 8.75% prepared units and to reduce debt outstanding under Regency's line of credit. The remaining 530,000 shares are expected to settle Sept. 8. Those proceeds will be used to redeem the $24 million of Series F 8.75% preferred units.

The company will record a charge of $1.4 million to net income for common stockholders in the third quarter for the original issuance costs associated with the redemption of the total $54 million of preferred units.

The portfolio acquired from CalPERS/First Washington totaled 13 million sf of retail in 17 states and the District of Columbia. Regency's partner in that deal is Macquarie Countrywide of Sydney, Australia. Macquarie owns 65% of the 96%-leased shopping centers; Regency, 35%. Regency's equity in the deal is about $400 million. To get the cash, the company drew on its line of credit coupled with a $275-million bridge loan provided by Wells Fargo Bank, as GlobeSt.com previously reported.

In a separate action, Regency has issued $75 million of Series 5 cumulative preferred stock. The shares will be redeemable at par at Regency's election on or after Aug. 2, 2010. The stock will pay dividends at a rate of 6.70% of the liquidation preference of $25 per share. The first dividend will be paid Sept. 30 of this year and will be prorated, based on a settlement date of Aug. 2. The company plans to use proceeds from the offering to reduce debt outstanding under its line of credit.