By Marisa Wong
Los Angeles, Aug. 19 – EastGroup Properties, Inc. and operating partnership EastGroup Properties, LP entered into a note purchase agreement on Aug. 16 to sell $150 million of senior notes, according to an 8-K filing with the Securities and Exchange Commission.
The notes consist of $75 million of 4.9% series A senior notes with an 11-year term and $75 million of 4.95% series B senior notes with a 12-year term.
EastGroup expects to issue and sell the notes on or before Oct. 12.
Semiannual interest-only payments will be required, with principal payments of $75 million with respect to the series A notes and $75 million with respect to the series B notes to be due and payable on the maturity dates, which are Oct. 12, 2033 and Oct. 12, 2034, respectively.
EastGroup will be permitted to prepay at any time all, or from time to time any part of, the outstanding notes, in the amount not less than 5% of the principal amount then outstanding at par plus a make-whole amount.
The notes will be guaranteed by some EastGroup subsidiaries.
The agreement contains terms 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 provide that EastGroup must maintain certain 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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| Amount: | $150 million
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| Issue: | Senior notes
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| Pricing date: | Aug. 16
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| Settlement date: | Oct. 12
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| Series A notes
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| Amount: | $75 million
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| Maturity: | Oct. 12, 2033
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| Coupon: | 4.9%
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| Series B notes
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| Amount: | $75 million
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| Maturity: | Oct. 12, 2034
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| Coupon: | 4.95%
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