Regency Centers Corporation (REG), a real estate investment trust (REIT), has recently closed a $250 million unsecured term loan to increase its liquidity and fund its huge development pipeline. The five-year term loan is scheduled to mature in December 2016 and includes an accordion feature that would enable Regency to repay it fully before maturity without any prepayment charges.
Wells Fargo Securities LLC, the investment banking division of Wells Fargo & Company (WFC) is acting as the sole Lead Arranger and Bookrunner for the debt facility. The term loan bears an interest rate of LIBOR plus 145 basis points, which is currently based on the long-term unsecured debt ratings of the company.
Earlier during third quarter 2011, Regency refinanced its $600 million unsecured revolving credit facility. The new credit facility is scheduled to expire in September 2015 with a one-year extension option and bears an annual interest rate of LIBOR plus 150 basis points.
These financial measures are aimed at maintaining a conservative capital structure with sufficient cash to fuel its growth engine. As part of its corporate strategy, Regency continuously seeks to create value from new development opportunities, and has developed 205 shopping centers since fiscal 2000 (including those currently in-process), representing an investment at completion of $3.0 billion.
By the end of third quarter 2011, Regency had 22 projects in various stages of construction for an estimated total investment at completion of $378.9 million. These in-process developments are presently 96% funded and 87% leased.
Jacksonville, Florida-based Regency owns, operates, and develops grocery-anchored retail shopping centers in the U.S. The company seeks to own assets in high-income in-fill markets that are tenanted by market-dominant grocers, category-leading anchors, specialty retailers and restaurants.
The average household income in the markets where Regency has a significant presence is over $96,000, nearly 33% higher than the national average. Regency’s quality portfolio is anchored by dominant grocers such as The Kroger Co. (KR) and leading national retailers such as Target Corp. (TGT), which drive traffic into its centers.
We maintain our ‘Neutral’ recommendation on Regency, which currently has a Zacks #3 Rank that translates into a short-term ‘Hold’ rating.
KROGER CO (KR): Free Stock Analysis Report
REGENCY CTRS CP (REG): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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