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Regency Centers Corporation (REG - Free Report) recently announced that its operating partnership — Regency Centers, L.P. — has priced a public offering of senior unsecured notes. The $425-million notes are priced at 99.903% of the principal amount and carry a yield of 2.950%.
The notes, due on Sep 15, 2029, will pay semi-annual interest on Mar 15 and Sep 15 of each year, with the first payment on Mar 15, 2020. Settlement of the offering, anticipated to occur on Aug 20, 2019, is subject to the fulfillment of customary closing terms.
Notably, net proceeds of the offering will be used to fully repay Regency’s outstanding term loan worth $300 million maturing on Dec 2, 2020. The loan also includes an interest rate swap breakage fees of nearly $1.1 million. Proceeds will also be used to reduce the outstanding balances on the company’s line of credit and for general corporate purposes.
By paying down its debt obligations and credit facility, this offering is anticipated to provide flexibility to the company. In addition, it highlights the company’s focus to address its financial obligations in an efficient way. Also, since unsecured notes can be borrowed at lower rates, this new debt will result in lower funding cost.
These efforts will likely boost Regency’s fortress balance sheet and substantial liquidity position. In fact, balance-sheet strength and conservative leverage levels have enabled the company to enjoy accessibility to secured and unsecured debt markets, and maintain availability on the line. The company exited the second quarter with $1.25 billion of line of credit and net debt to EBITDAre ratio of 5.3x.
While a strong capital position enables Regency to add value and enhance the quality of its portfolio, softness in the retail market continues to torment the company’s performance. Particularly, the latest penetration of online retailers into the grocery business has emerged as a concern for this REIT that focuses on building a premium portfolio of grocery-anchored shopping centers.
In fact, the shift in retail shopping to internet sales is affecting retail tenants’ sales, leading to retailers reconsidering their footprint and opting for store closures, thereby resulting in lesser demand for retail real estate space. This is adversely impacting retail landlords like Regency, Kimco Realty Corporation (KIM - Free Report) , Federal Realty Investment Trust (FRT - Free Report) and Taubman Centers, Inc. .
In fact, the Sears bankruptcy dampened Regency’s same-property portfolio leased rate and same-property NOI (net operating income) during the June-end quarter. Nonetheless, efforts to improve portfolio quality will likely drive long-term growth.
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Regency Centers Prices Senior Unsecured Notes Worth $425M
Regency Centers Corporation (REG - Free Report) recently announced that its operating partnership — Regency Centers, L.P. — has priced a public offering of senior unsecured notes. The $425-million notes are priced at 99.903% of the principal amount and carry a yield of 2.950%.
The notes, due on Sep 15, 2029, will pay semi-annual interest on Mar 15 and Sep 15 of each year, with the first payment on Mar 15, 2020. Settlement of the offering, anticipated to occur on Aug 20, 2019, is subject to the fulfillment of customary closing terms.
Notably, net proceeds of the offering will be used to fully repay Regency’s outstanding term loan worth $300 million maturing on Dec 2, 2020. The loan also includes an interest rate swap breakage fees of nearly $1.1 million. Proceeds will also be used to reduce the outstanding balances on the company’s line of credit and for general corporate purposes.
By paying down its debt obligations and credit facility, this offering is anticipated to provide flexibility to the company. In addition, it highlights the company’s focus to address its financial obligations in an efficient way. Also, since unsecured notes can be borrowed at lower rates, this new debt will result in lower funding cost.
These efforts will likely boost Regency’s fortress balance sheet and substantial liquidity position. In fact, balance-sheet strength and conservative leverage levels have enabled the company to enjoy accessibility to secured and unsecured debt markets, and maintain availability on the line. The company exited the second quarter with $1.25 billion of line of credit and net debt to EBITDAre ratio of 5.3x.
While a strong capital position enables Regency to add value and enhance the quality of its portfolio, softness in the retail market continues to torment the company’s performance. Particularly, the latest penetration of online retailers into the grocery business has emerged as a concern for this REIT that focuses on building a premium portfolio of grocery-anchored shopping centers.
In fact, the shift in retail shopping to internet sales is affecting retail tenants’ sales, leading to retailers reconsidering their footprint and opting for store closures, thereby resulting in lesser demand for retail real estate space. This is adversely impacting retail landlords like Regency, Kimco Realty Corporation (KIM - Free Report) , Federal Realty Investment Trust (FRT - Free Report) and Taubman Centers, Inc. .
In fact, the Sears bankruptcy dampened Regency’s same-property portfolio leased rate and same-property NOI (net operating income) during the June-end quarter. Nonetheless, efforts to improve portfolio quality will likely drive long-term growth.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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