Simon Property begins tender offers for $2.75 billion of five series

By Susanna Moon

Chicago, Sept. 3 – Simon Property Group, Inc. said its majority owned operating partnership subsidiary, Simon Property Group, LP, began tender offers for cash for five series of its senior notes.

Covered by the offers are $2.75 billion of outstanding note series, listed in order of priority acceptance level:

• $500 million outstanding principal amount of 5.875% notes due 2017;

• $650 million outstanding principal amount of 5.25% notes due 2016;

• $400 million outstanding principal amount of 6.1% notes due 2016;

• $600 million outstanding principal amount of 5.75% notes due 2015; and

• $600 million outstanding principal amount of 5.1% notes due 2015.

The offers will end at 5 p.m. ET on Sept. 10, with settlement following on Sept. 11.

The offers are conditioned on the company obtaining enough financing to fund the offers. If the company fails to obtain funding for each series of notes, tendered notes will be accepted based on the priority acceptance level.

Pricing details

Pricing will be set at 2 p.m. ET on Sept. 10 using the bid-side yield to maturity based on the bid-side price of the U.S. Treasury reference security plus a fixed spread, as follows:

• For the 5.875% notes, the 0.5% Treasury notes due Aug. 31, 2016 plus 35 basis points;

• For the 5.25% notes, the 0.5% Treasury notes due Aug. 31, 2016 plus 30 bps;

• For the 6.1% notes, the 0.375% Treasury notes due Jan. 31, 2016 plus 25 bps;

• For the 5.75% notes, the 0.375% Treasury notes due Aug. 31, 2015 plus 25 bps; and

• For the 5.1% notes, the 0.375% Treasury notes due June 15, 2015 plus 25 bps.

The purchase price for the 5.875% notes, the 5.25% notes, the 6.1% notes and the 5.75% notes will be set taking into account the par call date for that series.

The hypothetical purchase price for each $1,000 principal amount is $1,109.84 for the 5.875% notes, $1,086.53 for the 5.25% notes, $1,076.98 for the 6.1% notes, $1,052.36 for the 5.75% notes and $1,036.19 for the 5.1% notes using the yield to maturity of the U.S. Treasury reference security at 2 p.m. ET on Sept. 2 and assuming a hypothetical settlement date of Sept. 11.

The company also will pay accrued interest to but excluding the settlement date.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect), Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955 collect) and RBS Securities Inc. (877 297-9832 or 203 897-6145 collect) are the dealer managers. Global Bondholder Services Corp. (866 807-2200 or 212 430-3774 collect) is the information agent and the tender agent.

Simon is an Indianapolis-based real estate investment trust for retail properties.

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