Simon Property obtains $4 billion revolver, $2 billion delayed-draw

By Sarah Lizee

Olympia, Wash., March 16 – Simon Property Group, Inc. operating partnership Simon Property Group, LP entered on Monday into a senior unsecured credit facility comprised of an amendment and extension of its existing $4 billion revolver and a $2 billion delayed-draw term loan, according to an 8-K filing with the Securities and Exchange Commission.

The facilities replace in its entirety the operating partnership’s existing $4 billion revolver.

The revolving facility and the term facility can be increased in the form of either additional commitments under the revolver or incremental term loans under the term facility in a total amount for all increases not to exceed $1 billion, for a total size of $7 billion for the facilities.

The facilities will be in addition to and not affect the operating partnership’s existing $3.5 billion supplemental unsecured revolver, which will remain in place.

The revolver will mature on June 30, 2024, and the term facility will mature on June 30, 2022.

Both facilities can be extended for two additional six-month periods to June 30, 2025 and to June 30, 2023, respectively, at the operating partnership’s option, subject to some conditions.

The term facility is available to the operating partnership via a single draw during the nine-month period following the closing of the facilities.

Borrowings on the revolver bear interest at Libor plus 65 basis points to 140 bps, based on corporate credit ratings of the operating partnership.

Based on current credit ratings, the interest rate under the amended revolver has been reduced to Libor plus 70 basis points from Libor plus 77.5 bps, according to a press release.

The revolver includes a facility fee between 10 bps and 30 bps, also based on ratings, according to the 8-K filing.

Borrowings under the term facility bear interest at Libor plus 72.5 bps to 160 bps, based on ratings.

The term facility includes a ticking fee equal to 0.1% of the unused term loan commitment under the term facility. The ticking fee will start accruing 45 days after the closing of the term facility.

The revolver provides for borrowings denominated in U.S. dollars, euro, yen, sterling, Canadian dollars and Australian dollars.

Borrowings in currencies other than the dollar are limited to 95% of the maximum revolving credit amount.

The revolver contains a money market competitive bid option program that allows the operating partnership to hold auctions to achieve lower pricing for short-term borrowings.

Borrowings may be used for general corporate purposes.

The facilities contain ongoing covenants relating to total and secured leverage to capitalization value and minimum EBITDA and unencumbered EBITDA coverage requirements.

Prior to the amendment and restatement, the existing facility had an initial maturity of June 30, 2021 and an interest rate of Libor plus 77.5 bps with a facility fee of 10 bps.

JPMorgan Chase Bank, NA is administrative agent. JPMorgan and BofA Securities, Inc. are joint lead arrangers and joint bookrunners. BofA is the syndication agent.

For the revolver, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Mizuho Bank, Ltd., PNC Capital Markets LLC, Societe Generale, Sumitomo Mitsui Banking Corp., U.S. Bank NA and Wells Fargo Securities LLC are joint lead arrangers and co-syndication agents. BofA is the syndication agent. BBVA USA and Banco Santander, SA, New York Branch are the senior managing agents. Bank of New York Mellon, Credit Suisse Securities (USA) LLC, Fifth Third Bank and Regions Bank are managing agents.

For the term loan, Bank of New York Mellon, Bank of Nova Scotia, Mizuho Bank, Sumitomo and TD Securities (USA) LLC are joint lead arrangers and co-syndication agents. BNP, Citi and Societe Generale are co-documentation agents.

The real estate investment trust for retail properties is based in Indianapolis.

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