Simon Property wraps tenders for $1.32 billion of five note series

By Susanna Moon

Chicago, Sept. 11 – Simon Property Group, Inc. operating partnership subsidiary Simon Property Group, LP accepted all $1.32 billion of tendered notes in the offers for five series.

The tender offers ended at 5 p.m. ET on Sept. 10, with settlement set for Sept. 11.

The company plans to fund the purchase of the notes in the tender offers and the Sept. 30 redemption of the $250 million outstanding principal amount of the 7.875% notes due 2016 issued by one of its subsidiaries with proceeds of a new issue and cash on hand, according to a press release.

The breakdown for the tendered notes is as follows:

• $292,547,000, or 58.51%, of its $500 million outstanding principal amount of 5.875% notes due 2017;

• $285,724,000, or 43.96%, of its $650 million outstanding principal amount of 5.25% notes due 2016;

• $236,702,000, or 59.18%, of its $400 million outstanding principal amount of 6.1% notes due 2016;

• $233,365,000, or 38.89%, of its $600 million outstanding principal amount of 5.75% notes due 2015; and

• $273,184,000, or 45.53%, of its $600 million outstanding principal amount of 5.1% notes due 2015.

The $2.75 billion of notes are listed in order of priority acceptance level.

Pricing details

The purchase price for each $1,000 principal amount is as follows:

• $1,108.99 for the 5.875% notes due 2017;

• $1,085.79 for the 5.25% notes due 2016;

• $1,077.12 for the 6.1% notes due 2016;

• $1,052.34 for the 5.75% notes due 2015; and

• $1,036.13 for the 5.1% notes due 2015.

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

The offers were conditioned on the company obtaining enough financing to fund the offers. The financing condition was met for the first three series of notes and it was waived for the last two series, the company said Thursday.

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

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) were the dealer managers. Global Bondholder Services Corp. (866 807-2200 or 212 430-3774 collect) was the information agent and the tender agent.

Simon is an Indianapolis-based real estate investment trust for retail properties. It began the offer on Sept. 3.

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