Developers Diversified buys $250 million notes for $228 million

New York, Sept. 17 - Developers Diversified Realty said it paid approximately $228 million to buy $250 million principal amount of its outstanding notes in its oversubscribed Dutch auction tender offer.

In the offer, Developers Diversified bought:

• $42.295 million principal amount of its $193.574 million 5% notes due 2010 at $985 per $1,000 at a total of cost of $42.448 million, including accrued interest;

• $32.142 million principal amount of its $259.776 million 4.625% notes due 2010 at $975 per $1,000 at a total of cost of $31.528 million, including accrued interest;

• $4.442 million principal amount of its $185.169 million 5.25% notes due 2011 at $940 per $1,000 at a total of cost of $4.274 million, including accrued interest;

• $123.108 million principal amount of its $346.575 million 5.375% notes due 2012 at $900 per $1,000 at a total of cost of $113.591 million, including accrued interest;

• $30.329 million principal amount of its $200 million 5.5% notes due 2015 at $820 per $1,000 at a total of cost of $25.486 million, including accrued interest;

• $17.804 million principal amount of its $100 million 7.5% notes due 2018 at $850 per $1,000 at a total of cost of $15.572 million, including accrued interest.

In total, the company spent $232.899 million, including accrued interest, for $250.12 million of notes.

The clearing premium for the 2010 notes was $25 per $1,000 principal amount, for the 2011 and 2012 notes $0 per $1,000 principal amount and for the 2015 and 2018 notes $20 per $1,000 principal amount.

Developers Diversified previously announced on Aug. 31 that it had received tenders of $663.92 million.

At that point, in the first offer for up to $70 million of its 5% notes due 2010 and 4 5/8% notes due 2010, investors had tendered $89,420,000 of the 5% notes and $134,997,000 of the 4 5/8% notes.

In the second offer for up to $90 million of its 5¼% notes due 2011 and 5 3/8% notes due 2012, investors had tendered $75,222,000 of the 5¼% notes and $229,777,000 of the 5 3/8% notes.

Finally, in the third offer for up to $40 million of its 5½% notes due 2015 and 7½% notes due 2018, holders had tendered $88,389,000 of the 5½% notes and $46,119,000 of the 7½% notes.

The offer for the 2015 and 2018 notes ended at midnight ET on Sept. 11 and for the rest of the notes at midnight ET on Sept. 16.. They began on Aug. 13.

For each $1,000 principal amount, Developers said it would accept bids falling in the range of:

• $960 to $990 for the 5% notes;

• $950 to $980 for the 4 5/8% notes;

• $940 to $980 for the 5¼% notes;

• $900 to $940 for the 5 3/8% notes;

• $800 to $840 for the 5½% notes; and

• $830 to $870 for the 7½% notes.

All payouts include a $40 early participation payment for those who tendered prior to 5 p.m. ET on Aug. 27.

The company said it will also pay accrued interest to the settlement date.

Goldman, Sachs & Co. is the dealer manager (800 828-3182 or call collect 212 902-5183). Global Bondholder Services Corp. is the information agent and depositary (866 952-2200 or call collect 212 430-3774).

Cleveland-based Developers Diversified owns and manages roughly 690 retail operating and development properties.

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