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Simon Property accepts $2.3B of notes in offer

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Simon Property Group Inc. said Thursday that it will buy about $2.29 billion of notes tendered in response to an offer that expired Wednesday.

The Indianapolis-based real estate company, which operates regional malls and other retail property, anticipates a $166 million first-quarter charge related to the transaction.

Simon said its operating partnership, Simon Property Group LP, will fund the purchase with available cash plus proceeds from the sale of $2.25 billion in senior unsecured notes.

The sale is targeted to close on Monday.

The offering consists of $400 million of 4.2 percent notes due in 2015, $1.25 billion of 5.65 percent notes due in 2020 and $600 million of 6.75 percent notes due in 2040.

Simon said its liquidity will remain at about $7 billion after the transactions close.

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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