DDR closes new $400 million two-year term loan, refinances $800 million of revolving loans

By Susanna Moon

Chicago, April 23 – DDR Corp. said it obtained a new $400 million two-year unsecured term loan and refinanced two of its unsecured revolving credit facilities set to mature in April 2018.

The amended $750 million unsecured revolving credit facility, which matures in June 2019 and has a one-year extension option, was arranged by J.P. Morgan Securities LLC and Wells Fargo Securities, LLC and contains an accordion that provides for $1.25 billion of potential total capacity.

DDR also refinanced its unsecured revolving credit facility with PNC Bank, NA in the amount of $50 million, matching the terms of the $750 million unsecured revolving credit facility, according to a company press release.

Pricing on both revolvers was reduced to Libor plus 100 basis points, a drop of 15 bps, based on DDR's credit ratings.

DDR said it also entered into a new $400 million unsecured term loan arranged by Wells Fargo Securities, LLC and PNC Capital Markets, LLC.

The term loan matures in April 2017 with an extension option for three additional one-year periods.

Pricing on the term loan is Libor plus 110 bps.

At close, the unsecured term loan was undrawn but can be drawn at any time over the next 12 months.

Proceeds from the term loan will be used to retire the upcoming maturity of unsecured notes and secured mortgages. The four prime assets currently encumbered by $255 million of mortgage debt will be added to the unencumbered pool once the secured debt is retired.

The financings “are consistent with our stated objectives to extend duration and lower our cost of capital as we continue to focus on operating with an appropriate risk profile,” Luke J. Petherbridge, chief financial officer of DDR, said in the press release.

“Our new $400 million unsecured term loan addresses almost half of our 2015 debt maturities, and, at the same time, enables us to continue to grow our unencumbered pool while enhancing its quality with the expected addition of four franchise assets.”

DDR is a real estate investment trust is based in Beachwood, Ohio.

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