Rouse Properties $483.5 million loan expected at Libor plus 500 bps

By Sara Rosenberg

New York, Dec. 21 - Rouse Properties Inc.'s proposed $483.5 million three-year senior secured credit facility is expected to be priced at Libor plus 500 basis points with a 1% Libor floor, according to a 10-12B/A filed late Tuesday with the Securities and Exchange Commission.

The facility consists of a $433.5 million term loan and a $50 million revolver.

Wells Fargo Securities LLC, RBC Capital Markets LLC and U.S. Bank are the joint lead arrangers on the deal, with Wells Fargo the administrative agent.

Financial covenants include a net debt to value ratio, liquidity requirement, minimum fixed charge coverage ratio, minimum tangible net worth and minimum portfolio debt yield.

Proceeds will be used to pay down $395.1 million of existing debt that is primarily variable with an interest rate of Libor plus 325 bps.

At close about $20 million is expected to be drawn under the revolver.

The deal is being done in connection with Rouse's spinoff from General Growth Properties Inc.

Furthermore, the company is getting a $100 million 31/2-year subordinated unsecured revolving credit facility with Trilon, an affiliate of Brookfield Asset Management Inc., which is expected to be priced at Libor plus 850 bps with a 1% Libor floor.

General Growth said Tuesday that its board of directors approved the spinoff of its subsidiary Rouse, which will be completed on Jan. 12 through a pro rata taxable dividend of voting common stock of Rouse Properties held by General Growth to its stockholders of record as of the close of business on Dec. 30.

Rouse is a New York-based regional mall owner. General Growth Properties is a Chicago-based real estate investment trust that owns regional shopping malls, master planned community developments and commercial office buildings.

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