Macerich draws down $550 million on its revolver

By Rebecca Melvin

New York, March 27 – Macerich Co. has borrowed $550 million on its revolving line of credit to boost available cash due to uncertainty resulting from the Covid-19 pandemic, according to a news release.

The proceeds from its revolver combined with cash already on hand give the company about $735 million in cash.

The company has also taken actions to reduce ongoing cash outflows such as reducing all capital expenditures, including the size and pace of its redevelopment investments. In addition, the company announced that it has cut its quarterly dividend and that the dividend would be payable with an aggregate combination of 20% cash and 80% shares of company common stock. These measures will allow the company to comply with the REIT taxable income distribution requirements, while retaining capital.

The decision to use a stock dividend will be reviewed by the board of directors on a quarterly basis. The combination of the dividend reduction and the stock dividend will result in the company retaining incremental cash in excess of $98 million on a quarterly basis, and approximately $400 million if implemented annually.

Given the complex and rapidly evolving circumstances surrounding the pandemic, the company has withdrawn its previously published 2020 guidance and is not providing an updated outlook at this time.

Macerich is a Santa Monica, Calif.-based real estate investment trust.

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