Simon Property Group Inc.'s (NYSE: SPG) majority-owned partnership subsidiary, Simon Property Group, L.P., has agreed to sell $500 million aggregate principal amount of its 6.75 percent senior unsecured notes due 2014 in an underwritten offering through Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co. and UBS Securities LLC, as joint book-running managers. The notes were priced at 105.029 percent of the principal amount plus accrued interest from May 15, 2009 to yield 5.46 percent to maturity. The offering is expected to close on August 11, 2009.
The issue is a re-opening of the 6.75 percent notes due 2014 issued on May 15, 2009. The yield on the new notes is more than two percentage points less than what the company paid on the initial offering on May 11, according to Bloomberg. The firm'sshows that Simon’s new five-year notes are priced to yield 275 basis points more than benchmarks, compared with 497.9 basis points when Simon first issued the debt.
Upon closing, there will be $1.1 billion of this series of senior notes outstanding. Simon Property Group, L.P. intends to use the net proceeds of the offering for general business purposes. Last Tuesday, Simon said it ended its fiscal second quarter with access to $6.3 billion of cash from debt and equity issuances, as well as proceeds from refinanced mortgages. That translated into, about $9.50 per share of cash.
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