Simon Property Group Sells $1.0 Billion of Senior Notes

Rhea-AI Summary

Simon Property Group, L.P., the majority-owned operating partnership subsidiary of Simon®, a real estate investment trust, has agreed to sell $1.0 billion aggregate principal amount of its 4.750% Notes due 2034. The senior notes have a 10-year term and a 4.750% coupon rate. The offering is expected to close on September 26, 2024, subject to customary conditions.

The net proceeds will be used for general corporate purposes, including repaying other unsecured indebtedness. BNP Paribas, Citigroup, PNC Capital Markets , and US Bancorp are serving as joint book-running managers for the public offering, conducted under the Operating Partnership's shelf registration statement filed with the SEC.

Positive

• Successful $1.0 billion senior notes offering
• 10-year term provides long-term debt stability
• Proceeds to be used for debt repayment, potentially improving financial structure

Negative

• Increase in long-term debt obligations
• 4.750% coupon rate may impact interest expenses

Insights

Financial Analyst

Simon Property Group's $1 billion senior notes offering is a significant move that strengthens its financial position. The 4.75% coupon rate for 10-year notes is competitive in the current market, reflecting the company's strong credit profile. This debt issuance provides SPG with additional liquidity for general corporate purposes and debt refinancing, which could potentially lower its overall interest expenses.

The use of proceeds to repay other unsecured indebtedness suggests a proactive approach to managing the company's debt maturity profile. This strategy could help SPG maintain financial flexibility in a challenging retail real estate environment. The involvement of major financial institutions as joint book-running managers underscores the offering's credibility and market appeal.

For investors, this move indicates SPG's continued access to capital markets and ability to secure favorable financing terms. However, it's important to monitor how effectively the company deploys this capital, especially given the ongoing challenges in the retail sector and potential impacts on its premier shopping and mixed-use destinations.

Real Estate Investment Expert

This $1 billion notes offering by Simon Property Group is a strategic move in the REIT sector. As a premier retail REIT, SPG's ability to secure long-term financing at a 4.75% rate demonstrates market confidence in its business model and asset quality. The 10-year term provides stability to the company's capital structure, aligning with the long-term nature of real estate investments.

The timing of this offering is noteworthy, as it comes amid evolving consumer behaviors and the ongoing transformation of retail spaces. SPG's focus on "premier shopping, dining, entertainment and mixed-use destinations" positions it well to adapt to these changes. The additional capital could potentially be used to enhance existing properties or invest in new developments that align with current market trends.

Investors should view this as a positive indicator of SPG's financial health and its proactive approach to capital management. However, it's important to monitor how this debt is utilized to generate returns in an increasingly competitive and dynamic retail real estate landscape.

INDIANAPOLIS, Sept. 23, 2024 /PRNewswire/ -- Simon^®, a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations, announced today that its majority-owned operating partnership subsidiary, Simon Property Group, L.P. (the "Operating Partnership"), has agreed to sell $1.0 billion aggregate principal amount of its 4.750% Notes due 2034.

The new issue of senior notes has a term of 10 years and a coupon rate of 4.750%. The offering is expected to close on September 26, 2024, subject to customary closing conditions.

The Operating Partnership intends to use the net proceeds of the offering for general corporate purposes, including to repay other unsecured indebtedness.

BNP Paribas, Citigroup, PNC Capital Markets LLC and US Bancorp are serving as joint book-running managers of the public offering, which is being conducted under the Operating Partnership's shelf registration statement filed with the Securities and Exchange Commission. Any offer of securities will be made by means of the prospectus supplement and accompanying prospectus.

When available, copies of the prospectus supplement and accompanying prospectus can be obtained by contacting: BNP Paribas Securities Corp., 787 Seventh Avenue, New York, NY 10019, Attention: Debt Syndicate Desk, email: DL.US.Syndicate.Support@us.bnpparibas.com; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: 1-800-831-9146 or email: prospectus@citi.com; PNC Capital Markets LLC, 300 Fifth Avenue, 10th Floor, Pittsburgh, PA 15222 by email at pnccmprospectus@pnc.com or telephone, toll-free at 855-881-0967; or U.S. Bancorp Investments, Inc., 214 North Tryon Street, 26th Floor, Charlotte, North Carolina 28202, fax: 1-704-335-2393, Attention: Debt Capital Markets.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Forward-Looking Statements

Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although Simon Property Group, Inc. (the "Company") believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained, and it is possible that the Company's actual results may differ materially from those indicated by these forward–looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: changes in economic and market conditions that may adversely affect the general retail environment, including but not limited to those caused by inflation, recessionary pressures, wars, escalating geopolitical tensions as a result of the war in Ukraine and the conflicts in the Middle East, and supply chain disruptions; the inability to renew leases and relet vacant space at existing properties on favorable terms; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; the potential loss of anchor stores or major tenants; an increase in vacant space at its properties; the potential for violence, civil unrest, criminal activity or terrorist activities at its properties; natural disasters; the availability of comprehensive insurance coverage; the intensely competitive market environment in the retail industry, including e-commerce; security breaches that could compromise its information technology or infrastructure; reducing emissions of greenhouse gases; environmental liabilities; its international activities subjecting it to risks that are different from or greater than those associated with its domestic operations, including changes in foreign exchange rates; its continued ability to maintain its status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; the inability to lease newly developed properties on favorable terms; the loss of key management personnel; uncertainties regarding the impact of pandemics, epidemics or public health crises, and the associated governmental restrictions on its business, financial condition, results of operations, cash flow and liquidity; changes in market rates of interest; the impact of its substantial indebtedness on its future operations, including covenants in the governing agreements that impose restrictions on it that may affect its ability to operate freely; any disruption in the financial markets that may adversely affect its ability to access capital for growth and satisfy its ongoing debt service requirements; any change in its credit rating; risks relating to its joint venture properties, including guarantees of certain joint venture indebtedness; and general risks related to real estate investments, including the illiquidity of real estate investments.

The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in subsequent other periodic reports, but except as required by law, the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

About Simon

Simon^® is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.

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SOURCE Simon

FAQ

What is the amount and interest rate of Simon Property Group's (SPG) new senior notes offering?

Simon Property Group's operating partnership is selling $1.0 billion of 4.750% Notes due 2034.

When is the expected closing date for Simon Property Group's (SPG) $1.0 billion notes offering?

The offering is expected to close on September 26, 2024, subject to customary closing conditions.

How does Simon Property Group (SPG) plan to use the proceeds from the $1.0 billion notes offering?

The net proceeds will be used for general corporate purposes, including repaying other unsecured indebtedness.

Which financial institutions are managing Simon Property Group's (SPG) $1.0 billion notes offering?

BNP Paribas, Citigroup, PNC Capital Markets , and US Bancorp are serving as joint book-running managers for the public offering.