DDR tallies early tenders for notes from eight series, sets pricing

By Marisa Wong

Morgantown, W.Va., Feb. 13 – DDR Corp. announced the early tender results of its offers to purchase for cash any and all of its $300 million 3.5% notes due 2021 and up to $600 million principal amount of seven other series of notes.

As of the early tender deadline at 5 p.m. ET on Feb. 12, holders had tendered $256,474,000 of the 3.5% notes. In the capped offers, holders had tendered, with the notes listed in order of acceptance priority, $59,965,000 of the $82,196,000 of 7.5% notes due 2018; $212,791,000 of the $300 million of 3.375% notes due 2023; $284,386,000 of the $350 million of 3.9% notes due 2024; $307,804,000 of the $500 million of 3.625% notes due 2025, which had a tender sub-cap of $200 million; $270,878,000 of the $450 million of 4.625% notes due 2022, which had a tender sub-cap of $100 million; $195,081,000 of the $400 million of 4.25% notes due 2026, which had a tender sub-cap of $100 million; and $170,233,000 of the $450 million of 4.7% notes due 2027, which had a tender sub-cap of $150 million.

Because the capped offer was oversubscribed as of the early deadline, the company expects to accept for purchase all of the 7.5% notes due 2018, 3.375% notes due 2023 and 3.9% notes due 2024 tendered by the early deadline; some of the 3.625% notes due 2025, subject to proration; and none of the 4.625% notes due 2022, 4.25% notes due 2026 or 4.7% notes due 2027. The company said it will not accept for purchase any notes tendered after the early deadline under the capped offer.

The early settlement date is expected to be Feb. 16.

The company also announced that as of the early tender deadline, holders of a majority in principal amount of the 3.5% notes had delivered consents to some proposed amendments. The company is soliciting consents to amend the 3.5% notes to reduce the call notice required to two business days.

The company plans to call any remaining 3.5% notes after the tender offer ends.

The tender offer and consent solicitation will remain open until 11:59 p.m. ET on Feb. 27. Final settlement is slated for Feb. 28.

Pricing for the tender offers was set at 11 a.m. ET on Feb. 13 using a reference security and fixed spread. The total purchase price includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early deadline.

Pricing for the 3.5% notes was set using the 2% U.S. Treasury note due Jan. 15, 2021 plus a spread of 25 basis points for a total purchase price of $1,026.73 per $1,000 principal amount.

In the capped offers, the total purchase price per $1,000 principal amount is as follows:

• $1,023.01 for the 7.5% notes due 2018, priced using the 0.875% U.S. Treasury note due July 15, 2018 plus 15 bps;

• $1,005.95 for the 3.375% notes due 2023, based on the 2.375% U.S. Treasury note due Jan. 31, 2023 plus 70 bps;

• $1,025.71 for the 3.9% notes due 2024, based on the 2.375% U.S. Treasury note due Jan. 31, 2023 plus 90 bps; and

• $988.89 for the 3.625% notes due 2025, based on the 2.25% U.S. Treasury note due Nov. 15, 2027 plus 95 bps.

Pricing for the 4.625% notes due 2022 would have been based on the 2.375% U.S. Treasury note due Jan. 31, 2023 plus 65 bps; pricing for the 4.25% notes due 2026 would have been based on the 2.25% U.S. Treasury note due Nov. 15, 2027 plus 115 bps; and pricing for the 4.7% notes due 2027 would have been based on the 2.25% U.S. Treasury note due Nov. 15, 2027 plus 120 bps.

Tenders may no longer be withdrawn.

The tender offers contain a financing condition that states the company must close its committed commercial mortgage-backed securities financing with enough proceeds to fund the offers.

None of the offers requires a minimum tender amount.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) are the dealer managers. D.F. King & Co., Inc. (866 796-1290, 212 269-5550 or ddr@dfking.com) is the tender agent and information agent.

DDR is a Beachwood, Ohio-based real estate investment trust that owns and manages shopping centers.

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