The retail real estate investment trust (REIT),
Simon Property Group Inc.
), disclosed the decision of its majority-owned operating
partnership subsidiary - Simon Property Group, L.P. - to make a
public offering of €750 million ($1.01 billion) principal amount
of 2.375% senior unsecured notes due 2020. The offering of the
notes is anticipated to close on Oct 2, 2013.
In particular, Simon Property Group, L.P. plans to utilize the
generated proceeds mainly for paying off euro denominated debts
under the unsecured revolving credit facility. The remaining
proceeds are expected to be used for other corporate
A consortium of leading financial institutions such as J.P.
Morgan Securities plc of
JPMorgan Chase & Co.
), The Royal Bank of Scotland plc, Goldman Sachs International of
The Goldman Sachs Group, Inc.
), Mitsubishi UFJ Securities International plc and Barclays Bank
) acted as the joint book-running managers for the public
The aforementioned transaction is strategic fit as it will
lower debt and consequently the interest expenses. Moreover,
increased financial flexibility will enable Simon Property to
pursue its portfolio restructuring activity that will go a long
way in enhancing its top-line growth. Notably, as of Jun 30,
2013, Simon Property's cash and cash equivalents amounted to
As a matter of fact, Simon Property has been actively
capitalizing on growth opportunities in fast-growing markets
worldwide. Earlier this month, the company began developing the
Charlotte Premium Outlets in North Carolina. Moreover, last month
Simon Property opened its third Premium Outlet Center - Busan
Premium Outlets - in South Korea and its first Premium Outlet
Center - St. Louis Premium Outlets - in Chesterfield. We believe
that such activities will help boost Simon Property's top line
and strengthen the company's upscale portfolio base.
Simon Property currently carries a Zacks Rank #3 (Hold).
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