By Marisa Wong
Los Angeles, Feb. 8 – EastGroup Properties, LP and EastGroup Properties, Inc. entered into a note purchase agreement dated Feb. 3 to sell $150 million of 3% senior notes with a 10-year term, according to an 8-K filing with the Securities and Exchange Commission.
EastGroup expects to issue and sell the notes on or before April 20.
Semiannual interest-only payments will be required with a principal payment of $150 million on the maturity date, which is expected to be April 20, 2032.
The notes may be prepaid in whole or in part, in an amount of at least 5% of the notes then outstanding, at par plus a make-whole amount.
The notes will be guaranteed by some EastGroup subsidiaries.
The agreement contains customary covenants that are substantially similar to the covenants in the company’s other outstanding senior notes, including requirements for the company to maintain its ratio of total liabilities to total asset value at 60% or less and its secured debt to total asset value at 40% or less. Other debt covenants require EastGroup to maintain specified fixed-charge coverage ratios and ratio of unencumbered net operating income to total unsecured interest expense.
In addition, EastGroup may not pay dividends or make distributions with respect to its equity in excess of 90% of its funds from operations, except to the extent necessary to enable it to continue to qualify as a REIT for tax purposes.
The real estate investment trust company is based in Ridgeland, Miss.
| Issuers: | EastGroup Properties, LP and EastGroup Properties, Inc.
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| Issue: | Senior notes
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| Amount: | $150 million
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| Maturity: | April 20, 2032
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| Coupon: | 3%
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| Pricing date: | Feb. 3
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| Expected settlement: | April 20
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