Simon Property plans debt sale to fund tender offer

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Simon Property Group Inc., the largest U.S. shopping-mall owner, plans to sell $750 million of notes to fund a tender offer for outstanding debt for the second time this year.

The company plans to issue 10.5-year notes as soon as Monday, according to a person familiar with the transaction. Proceeds will be used to finance a tender offer for outstanding debt maturing in 2013 and 2014, Simon said Monday in a regulatory filing that didn’t specify the size, maturity or timing of the sale.

Simon, based in Indianapolis, is marketing debt after reporting earnings that rose as national retail sales improved and rents climbed. Developers Diversified Realty Corp., the owner and manager of shopping centers in the U.S., Brazil and Canada, is also selling notes Monday, as bonds issued by U.S. retail real estate investment trusts, or REITs, outperform overall corporate debt.

Bonds sold by U.S. retail REITs have returned 12.5 percent this year through Aug. 6, including reinvested interest, according to Bank of America Merrill Lynch’s U.S. Retail REIT index. That compares with the 8.8-percent return on overall U.S. corporate debt, the data show.

Simon sold $2.25 billion of notes in three parts on Jan. 19 to help finance its tender offer for approximately $2.3 billion of outstanding notes, according to its most recent quarterly filing.

Simon’s 5.65-percent, 10-year notes issued in January priced to yield 200 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The notes traded on Aug. 5 at 109.803 cents on the dollar to yield 4.349 percent, or a 144.5 basis-point spread, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Simon is seeking to repurchase its 5.3-percent senior notes due 2013, 6.75-percent senior notes due 2014 and 5.625 percent senior securities due 2014, the company said Monday in a statement distributed by PR Newswire. There is $2.3 billion outstanding of the debt, according to the statement.

Monday’s notes may be rated A3 by Moody’s Investors Service and A- by Standard & Poor’s, said the person, who declined to be identified because terms aren’t set.
Developers Diversified Realty plans to sell $250 million of 10-year notes as soon as Monday, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. The Beachwood, Ohio-based company plans to use proceeds from the offering to repay debt, according to a regulatory filing today.


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  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

  4. Marijuana is the safest natural drug grown. Addiction is never physical. Marijuana health benefits are far more reaching then synthesized drugs. Abbott, Lilly, and the thousands of others create poisons and label them as medication. There is no current manufactured drug on the market that does not pose immediate and long term threat to the human anatomy. Certainly the potency of marijuana has increased by hybrids and growing techniques. However, Alcohol has been proven to destroy more families, relationships, cause more deaths and injuries in addition to the damage done to the body. Many confrontations such as domestic violence and other crimes can be attributed to alcohol. The criminal activities and injustices that surround marijuana exists because it is illegal in much of the world. If legalized throughout the world you would see a dramatic decrease in such activities and a savings to many countries for legal prosecutions, incarceration etc in regards to marijuana. It indeed can create wealth for the government by collecting taxes, creating jobs, etc.... I personally do not partake. I do hope it is legalized throughout the world.

  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.