DDR Corp. (DDR), a real estate investment trust that owns shopping centers in the U.S., Puerto Rico and Brazil, got $1.2 billion of loans to refinance debt on cheaper terms while pushing out maturities.
A $750 million revolving credit line and a $400 million term loan maturing in 2017 will replace two revolvers that were set to mature in 2016 and a term loan due in 2014, according to a statement distributed today by PR Newswire.
JPMorgan Chase & Co. and Wells Fargo & Co. (WFC) arranged the unsecured revolver, which may be expanded to $1.25 billion, DDR said. The Beachwood, Ohio-based company also refinanced a $65 million credit line provided by PNC Bank NA on the same terms.
“These refinancings are consistent with our stated objectives to extend duration and lower our cost of capital as we continue to reduce our corporate risk profile,” David J. Oakes, DDR’s president and chief financial officer, said in the statement.
The interest rate on both revolvers was set a 1.4 percentage points more than the London interbank offered rate, a reduction of 25 basis points, according to the statement. A basis point is 0.01 percentage point.
KeyBanc Capital Markets Inc. and RBC Capital Markets LLC arranged the new term loan at an interest rate of 1.55 percentage points more than Libor, which is 15 basis points lower than the credit it replaced, according to the statement.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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