Mack-Cali Prices Senior Notes - Analyst Blog

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Mack-Cali Realty Corporation ( CLI ), one of the largest office real estate investment trusts (REITs) in the U.S., has recently priced a secondary offering of 4.50% senior unsecured notes worth $300 million that is scheduled to mature in 2022. The company has priced the notes at 99.801% of the face amount to yield 4.525% at maturity.

BofA Merrill Lynch, the investment banking and wealth management division of Bank of America Corporation ( BAC ); J.P. Morgan Securities LLC, the investment banking division of JPMorgan Chase & Co. ( JPM ); and Citigroup, Inc. ( C ), a global financial services company, are acting as joint book-running managers for the public offering.

Mack-Cali expects to raise net proceeds of approximately $296.8 million from the debt offer, after deducting underwriting discounts and other expenses related to the offering. The company intends to utilize the cash to repay short-term debt and to reduce outstanding debt under its revolving credit facility and secured term loan.

Earlier, during fourth quarter 2011, Mack-Cali refinanced its unsecured revolving credit facility with a consortium of 20 lenders. The borrowing capacity of the $600 million unsecured facility could be further extended up to $1 billion. The credit facility has a four-year term with a one-year extension option.

At year-end 2011, the company had a total debt of $1.9 billion, with a debt-to-undepreciated assets ratio of 33.6%, an interest coverage ratio of 3.3x, and cash and cash equivalents of $20.5 million.

Mack-Cali is primarily engaged in owning, leasing, managing and developing Class A office and industrial/flex properties with approximately 2,000 tenants from diverse industries. The company focuses on high-barrier markets mostly in the suburban areas in the northeast and mid-Atlantic regions in the U.S., and derives most of its annualized base rents from New Jersey.

With debt-free ownership of the bulk of its portfolio, Mack-Cali offers a faster and more streamlined leasing process. In addition, Mack-Cali is structured as a vertically integrated company, providing a full range of leasing, property management, construction, legal, space planning and architectural services on a single platform.

We maintain our long-term Neutral recommendation on Mack-Cali, which currently retains a Zacks #3 Rank that translates into a short-term Hold rating.


 
BANK OF AMER CP ( BAC ): Free Stock Analysis Report
 
CITIGROUP INC ( C ): Free Stock Analysis Report
 
MACK CALI CORP ( CLI ): Free Stock Analysis Report
 
JPMORGAN CHASE ( JPM ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BAC , C , CLI , JPM

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