Simon Property Boosts Credit Revolver to $6B

The company’s move comes in the context of a very active first quarter for both acquisitions and development.
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Shopping mall powerhouse Simon Property Group has amended and extended its existing $4 billion senior unsecured multi-currency revolving credit facility by 50 percent in dollar value. The new $6 billion senior unsecured credit facility consists of a $4 billion revolving credit facility and a $2 billion delayed-draw term loan facility.

READ ALSO: Simon’s $3.6B Taubman Buy a Positive Sign for Class A Malls

The revolver provides for borrowings denominated in U.S. dollars, euros, yen, sterling, Canadian dollars and Australian dollars. The facilities’ aggregate amount may be increased in the form of additional revolving commitments and/or additional term loans up to $7 billion.

The revolving facility will mature on June 30, 2024, and the term facility will mature on June 30, 2022. Each maturity date may be extended for up to one year. Based on Simon’s current credit ratings, the interest rate under the amended revolving facility has been reduced to LIBOR plus 70 basis points, from LIBOR plus 77.5 basis points.

In a prepared statement, Simon’s Chairman, CEO & President, David Simon, noted that the new credit facility is on top of an existing $3.5 billion senior unsecured credit facility giving the company $9.5 billion of total credit capacity.

JPMorgan Chase Bank and BofA Securities were the facility’s joint lead arrangers and joint bookrunners. BNP Paribas, Citibank, Mizuho Bank, PNC, Société Generale, Sumitomo Mitsui Banking Corp., U.S. Bank and Wells Fargo were joint lead arrangers and co-syndication agents, and Bank of America was syndication agent.

Bank of Nova Scotia, Barclays, Deutsche Bank, Goldman Sachs, The Royal Bank of Canada, TD Bank and Truist Bank were co-documentation agents; and Compass Bank and Banco Santander were senior managing agents. There were in addition four managing agents and co-lenders in the facility.

Good news and bad news

Even though it’s only March, this has been a year of big news about Simon. The REIT is, of course, moving toward closing its $3.6 billion purchase of an 80 percent interest in Taubman. Soon after, Simon and partners moved to buy the troubled Forever 21 retail chain. And barely two weeks ago, Simon broke ground on Tulsa Premium Outlets, a 340,000-square-foot outlet center in Jenks, Okla.

The coronavirus pandemic was already starting to affect the retail sector as of the beginning of March, according to a March 4th report from JLL. The report notes: “Retailers with recent quarterly calls have braced investors for diminished returns in Q1 and potentially Q2 depending on the outbreak severity. We can expect to see some retailers struggle to replenish inventory in the coming weeks to months.”

The most vulnerable industries, JLL predicts, are likely to be “automotive, pharmaceutical, textiles, and consumer electronics due to their complex supply chains and dependence on Chinese factories.” Though shoppers seeking to avoid public areas are likely to shop online instead, the report warns that “supply chain disruptions may add time to retailer’s typical delivery windows. The Port of Los Angeles has already seen a quarter of sailings canceled as container volumes drop.”