Ramco-Gershenson Properties Trust Announces Agreements for $175 Million in New Long-Term Unsecured Financing

Farmington Hills, Michigan, UNITED STATES

FARMINGTON HILLS, Mich., May 19, 2014 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE:RPT) (the "Company") today announced two agreements in principle for an aggregate $175 million of long-term, senior unsecured debt financing. Proceeds will be used to repay existing debt with shorter-term maturities.

The Company has reached an agreement to issue a $100 million private placement of senior unsecured notes with Prudential Capital Group. The financing will consist of $50 million of notes with a ten-year term priced at a fixed interest rate of 4.65% and $50 million of notes with a twelve-year term priced at a fixed interest rate of 4.74%. The sale of these notes is expected to close on May 28, 2014. The Company has also agreed to a "shelf" facility that will allow it to issue another $50 million in notes with Prudential Capital Group over the next three years, subject to approval, pricing, and documentation.

The Company has also reached an agreement for a $75 million senior unsecured term loan fully underwritten and arranged by Capital One, N.A. The loan has a term of seven years, is prepayable without penalty after two years, and is expandable pursuant to a $75 million accordion feature. The term loan will bear interest at an annual rate of LIBOR plus 1.25% to 2.25% (initially 1.70%) depending upon the Company's leverage or credit ratings. Interest expense will be hedged with an existing interest rate swap expiring in April 2016, resulting in an effective fixed initial annual rate of 2.9%. Documentation and funding of the loan is expected to be completed by the end of May.

Proceeds from the two financings will be used to repay $45 million of variable-rate borrowings outstanding under the Company's unsecured revolving line of credit, $45 million of variable-rate bank term debt due 2017, and $75 million of bank term debt due in 2017 that is subject to the interest-rate swap referred to above, as well as for general corporate purposes. The Company expects to record a charge for the early extinguishment of debt in the second quarter of approximately $852,000, or $0.01 per diluted share.

Upon the closing of the new financings and the repayment of existing debt, the Company will benefit from a stronger balance sheet as reflected by the following measures (based upon the Company's pro-rata share of consolidated and joint-venture debt):

  • A weighted-average term to maturity of approximately 6.6 years, an increase from 5.1 years;
  • Well-staggered debt maturities with no more than 16% of total debt maturing in any single year;
  • Unencumbered operating assets to unsecured senior debt coverage of 3.2X;
  • Over 95% of total debt at fixed rates or swapped to fixed rates; and
  • Over $232 million of borrowing availability under the Company's $240 million unsecured revolving line of credit.

The issuance of the senior unsecured notes and term loan is subject to customary conditions including, among others, the negotiation and execution of loan documents. There can be no assurance that these conditions will be satisfied or that the issuance of the notes will occur on the terms described herein or at all. 

About Ramco-Gershenson Properties Trust

Ramco-Gershenson Properties Trust (NYSE:RPT) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan.  The Company's business is the ownership and management of multi-anchor shopping centers in strategic metropolitan markets throughout the Eastern, Midwestern and Central United States.  At March 31, 2014, the Company owned and managed a portfolio of 79 shopping centers and one office building with approximately 15.8 million square feet of gross leasable area owned by the Company or its joint ventures. The properties are located in Michigan, Florida, Ohio, Georgia, Missouri, Colorado, Wisconsin, Illinois, Indiana, New Jersey, Virginia, Maryland, and Tennessee. At March 31, 2014, the Company's core operating portfolio was 95.8% leased. Additional information regarding the Company is available via the corporate website at www.rgpt.com.

This press release may contain forward-looking statements that represent the Company's expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the Securities and Exchange Commission