), a real estate investment trust (REIT), has acquired funds
worth $1.2 billion for refinancing its debt. The move will help
the company lower its cost of capital as well as extend the
DDR, in particular, has obtained a new $750 million unsecured
revolving credit facility as well as a $400 million term loan,
both of which will mature in 2017. With this, the company
refinanced two of its senior unsecured revolving credit
facilities scheduled to mature in February 2016 and its senior
secured term loan due in September 2014.
The $750 million revolving credit facility, arranged by
JPMorgan Chase & Co.
Wells Fargo & Co.
), may be increased to $1.25 billion. The company also refinanced
its $65 million unsecured revolving credit facility that was
offered by PNC Bank of the PNC Financial Group Inc. (PNC) on
In addition to the extension of the maturities, DDR can benefit
from cheaper rates of the current facilities. Both the revolving
credit lines currently bear interest rate of LIBOR plus 140 basis
points (bps), reflecting a decrease of 25 bps from the prior
Moreover, the annual facility fee for both revolving credit
lines has been lowered to 30 bps from 35 bps. Also, the new term
loan's interest rate is currently set at LIBOR plus 155 bps,
resulting in a decline of 15 bps from the prior rate.
DDR CORP (DDR): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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Thus, the move is a strategic fit and provides DDR adequate
financial flexibility. Moreover, the company has a
well-diversified portfolio concentrated mostly in the high growth
areas of the country, including Florida, California, Texas and
North Carolina. With a focus on best-in-class retailers in
strategic locations, the portfolio drives value and mitigates
operating risks by generating a relatively steady revenue stream.
DDR is scheduled to release its fourth-quarter 2012 results on
Feb 12, 2013. The Zacks Consensus Estimate for the fourth-quarter
FFO (fund from operations) is currently pegged at 27 cents per
DDR currently holds a Zacks Rank #4 (Sell). However, we maintain
our long-term Neutral recommendation on the stock.
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.