Macerich retires $56.8 million 3.25% convertibles at discount for quarter ended March 31

By Susanna Moon

Chicago, May 11 - Macerich Co. repurchased $56.8 million of its 3.25% convertible senior notes for $30.7 million during the three months ended March 31, according to a 10-K filing with the Securities and Exchange Commission.

The company said it funded the repurchase by borrowing under its line of credit.

The carrying value of the notes was $636.7 million at March 31 and $687.7 million at Dec. 31, which included an unamortized discount of $33.6 million and $39.5 million, respectively.

On April 21, Macerich retired an additional $25 million of the notes for $17 million, resulting in gain on early extinguishment of $6.6 million debt.

The company said on Feb. 27 that it retired $222.8 million of the notes from Oct. 21 to Dec. 29 and recorded a gain of $95.3 on early extinguishment of debt for the year ended Dec. 31.

Macerich said the purchase price of $122.8 million was funded by its credit line.

On Feb. 13 and Feb. 17, the company retired an additional $56.8 million of the notes for $30.9 million, resulting in a gain on early extinguishment of debt of $25.1 million.

The company issued $950 million of the notes on March 16, 2007.

The notes are convertible upon the occurrence of certain events until Dec. 14, 2011 at a rate of 8.9702 shares per $1,000 principal amount, with the conversion amount payable in cash, common stock or a combination of cash and shares, at the election of the company. Beginning Dec. 15, 2011, the notes are convertible at any time.

The conversion price is $111.48 per share, which represents a 20% premium over the closing price of the company's common stock on March 12, 2007.

The notes are not putable, except in connection with some fundamental changes.

The company's adjusted stock price closed at $19.30 (NYSE: MAC) on May 8. The company's stock closed at $92.90 on March 12, 2007, or at an adjusted price of $78.26.

Macerich is a Santa Monica, Calif.-based real estate investment trust that focuses on regional and community shopping centers.

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