In order to enhance its financial flexibility,
Taubman Centers Inc. (
recently increased its erstwhile $650 million primary revolving
line of credit to $1.1 billion. Additionally, it includes a
provision, which will enable the company to increase its
borrowing capacity up to $1.5 billion, if fully exercised.
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This real estate investment trust (REIT) stated that the new line
of credit, which will mature in 2017, bears a one-year extension
option and its pricing is based on its total leverage ratio. As
of Mar 1, 2013, the revolving credit facility bears a rate at
LIBOR plus 1.45% with an annual 0.20% facility fee.
Notably, the Taubman's line of credit is guaranteed by the
entities that own Twelve Oaks Mall in Novi, The Shops at Willow
Bend in Plano, Fairlane Town Center in Dearborn and Dolphin Mall
J.P. Morgan Securities LLC - part of
JPMorgan Chase & Co. (
- acted as the joint lead arranger and sole book-running manager
for the transaction. Whereas, PNC Bank N.A. of
PNC Financial Services Group, Inc (
and U.S. Bank N.A. of
U.S. Bancorp (
acted as joint lead arrangers and co-syndication agents.
This is an important strategic financial arrangement for Taubman
as it will provide the company additional liquidity. Moving
forward, the strategic move could help seize favorable investment
opportunities, which in turn will likely boost its top-line
Subsequent to the end of the fourth quarter, Taubman accomplished
a 10-year, non-recourse financing worth $225 million in Great
Lakes Crossing Outlets (Auburn Hills, Mich.). The loan bears a
fixed-rated interest of 3.63%. The company got around $100
million of excess proceeds following the repayment of the prior
outstanding $126 million, 5.25% fixed rate loan. The company used
the excess proceeds to lessen its outstanding borrowings under
the company's revolving lines of credit.
Last month, Taubman reported fourth quarter 2012 results with
adjusted FFO (funds from operations) of $1.00 per share exceeding
the Zacks Consensus Estimate by 3 cents and prior-year quarter
earnings by 7 cents. As of Dec 31, 2012, Taubman's cash position
stood at $32.1 million.
Taubman currently retains a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.