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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