Simon Property Group Lands $3.5B Revolving Credit Facility
This move provides the company with $8.5 billion of total revolving credit capacity.
Simon Property Group L.P., the majority-owned operating partnership subsidiary of prominent retail REIT Simon, has amended, restated and extended its $3.5 billion multi-currency unsecured revolving credit facility.
Simon reported that the amended and extended credit facility enhances the company’s financial flexibility and provides the company with $8.5 billion of total revolving credit capacity, when combined with its existing $5.0 billion senior unsecured credit facility. The facilities reportedly are supported by a globally diverse lender group composed of 28 banks.
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The amended facility will initially mature on Jan. 31, 2029, and can be extended for an additional year, to Jan. 31, 2030, at the sole option of the operating partnership. Based on the operating partnership’s current credit ratings, the interest rate for U.S. dollar borrowings is unchanged from the prior facility at SOFR plus 82.5 basis points, which includes a 10-basis-point SOFR spread adjustment.
Seismic shift
Bolstering and updating its credit capacity should help Simon stay at the forefront of the retail sector’s nationwide move toward a more experiential focus.
In June, Commercial Property Executive reported on Simon Property Group’s deal with Camp, under which the latter will open spaces of more than 10,000 square feet each at Simon’s King of Prussia Mall, near Philadelphia, and at the Galleria Mall in Houston, the latter debuting in 2025.
Simon has also signed a deal with Netflix to open one of the steaming service’s new experiential concepts at King of Prussia Mall. The upcoming Netflix House store is scheduled to open in 2025. The venue will include retail, dining and live entertainment.
Unsecured spreads near pre–rate-hike thresholds
In another recent deal, STAG Industrial has refinanced its $1 billion senior unsecured revolving credit facility. The new maturity date was set for 2028, with two six-month extension options, subject to certain conditions and no changes to pricing.
Abby Corbett, a senior economist & head of investor insights at Cushman & Wakefield, commented for Commercial Property Executive that when the debt markets on the private, secured side aren’t as cost-competitive or fluid, there is still the benefit of tapping into unsecured debt. “Unsecured spreads are still range-bound to near pre–rate-hike thresholds,” Corbett said.
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