NEW YORK CITY-Regional mall REIT Rouse Properties said Monday it had closed on a $510-million corporate credit facility. The facility replaces the company's existing $337.9-million credit facility, which was due to mature in January 2015, and consists of a $260-million, five-year term loan and a $250-million revolving line of credit with a four-year initial term and a one year extension option.
“With the closing of this facility we have taken another meaningful step towards supporting the future growth of our company and improving our financial flexibility and balance sheet,” says Andrew Silberfein, Rouse's president and CEO. He adds that the increase in the company's bank revolver capacity, coupled with “significant reduction in the cost of this capital and the long-term nature of this commitment,” speaks to “not only the operational and leasing progress we have achieved to date, but highlights the improvement in Rouse's financial strength as we continue to build value for our shareholders.“
Borrowings on the new facility will bear interest at grid pricing of Libor plus 185 to 300 basis points based on corporate leverage, compared to the Libor plus 450 bps of the company's previous facility. Rouse's revolving line of credit capacity will increase by $100 million, while the $100-million subordinated revolving line of credit maturing in June of '15 will be eliminated. Proceeds from the increased term loan component will be used to retire a $70.9-million non-recourse mortgage loan on Southland Mall in Hayward, CA prior to its maturity date this coming January.
Earlier this month, Rouse announced third-quarter results for the three months that ended Sept. 30. Its core funds from operations was $18.7 million, or $0.37 per diluted share, as compared to $14.5 million, or $0.29 per diluted share in Q3 2012.
The REIT leased 530,000 square feet during Q3, marking the sixth straight quarter with over 525,000 square feet of leasing activity. Across its portfolio, inline leased percentage was 90.7% at quarter's end, a gain of 140 bps year-over-year and 80 bps from the previous quarter.
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