Federal Realty Investment Trust
) is raising capital through notes issuance. The company, in
particular, disclosed the pricing of senior unsecured notes to
strengthen its liquidity position, meet near term debt maturities
and other corporate needs.
Federal Realty priced the public offering of 3.95% senior
unsecured notes worth $300 million at 99.018% of the principal
amount. The senior unsecured notes, due Jan 15, 2024, carry a
yield to maturity of 4.069%. Starting Jul 15, 2014, the interest
on the notes will be payable on Jan 15 and Jul 15 of each year.
The offering is anticipated to close on Dec 9, 2013, upon
fulfillment of customary closing conditions.
Specifically, Federal Realty plans to use the net proceeds to
buy back all of its outstanding 5.95% notes due 2014 and to repay
outstanding amount of around $72 million under its revolving
credit facility. Moreover, the company intends to use the
remaining amount for meeting general corporate needs such as
portfolio repositioning activity.
Reputed financial institutions - J.P. Morgan Securities LLC of
JPMorgan Chase & Co.
), Wells Fargo Securities, LLC of
Wells Fargo & Company
) and Citigroup Global Markets Inc. of
) assisted Federal Realty as joint book-running managers for the
For Federal Realty, which exited the third quarter 2013 with
cash and cash equivalents of $127.8 million, the aforementioned
transaction is a strategic fit. It will help the company in
managing its debt obligations and interest expenses efficiently.
Apart from that, increased financial strength will enable Federal
Realty to invest in growth drivers that will go a long way in
enhancing its portfolio's quality.
Currently, Federal Realty carries a Zacks Rank #3 (Hold).
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