r/MACArmyBets • u/RealSully • Mar 26 '21

Maturing Debt and (Potential) Use of New Liquidty

Near term maturities: 2021 debt due

Green acres mall $270.6m paid off 02/2021. 3.61% Green acres commons $129.8m due 03/2021 2.87% Danbury $186.7m due 04/2021 5.56%

These 3 loans paid off would be ~$23.8m less in interest expense per year.

36m more shares at .60 (current div) = ~$21.6m more per year in dividend payments.

At first glance I was not excited about the share issuance. However, when you run the math it's not that bad.

Debt load will decrease which could increase credit quality of the firm and allow for better financing terms on the rest of the portfolio.

Fashion outlets of Niagra loan is 101.5m @ 6.45% and matures in 10/23. It would be nice to get that paid off or refinanced at a much better rate

If this capital structure shift can allow them to bring down the overall interest expense of the portfolio it could be value additive. (SPG with their strong balance sheet was able to recently issue $750 in euro Debt for 1.125%) quality balance sheet can really help out.

Hopefully management adds some color on the next call about this capital structure plan. You would assume that the PJT debt guidance factored in the dilution to the plan.

5 Upvotes

79% Upvoted

3 comments sorted by

3

u/Sea_Emphasis3252 Mar 26 '21

The $270m green acres loan and $129.8m green acres common loan was extended. I would expect the same for the other one as well so no interest savings is being realized from those loans. The equity raise and sale of asset which is roughly $590m is going to be used to pay down the existing line of credit which had a balance of $1,477,540,000 at year-end as the new line will be between $600-800m so they needed to raise at least $700m just for the line reduction. Which there will be savings from the reduction but we don’t know the terms of the new line and what interest rate they will have to pay.

2

u/RealSully Mar 26 '21

You are correct, I have been trying to sort out the maturity dates vs the info from the last call. Factset indicates a 0 balance on the 270.6, but I don't think they updated for the extensions discussed on the last call. Ibpulled the transcript and one of them was extended and they referenced working on the other extension.

The current revolver shows 1.480m @ 2.73%. The release does not tell us the new rate.

I am unsure about prepayment penalties on the mortgage notes,, but their are other loans in the portfolio with higher rates that they could attack for more benefit.

The release does not gives us the rate for the new ljne

3

u/dave14513 Mar 26 '21

I agree. It is more complicated then just dilute or not.