DDR Refinances Credit Facilities - Analyst Blog

Developers Diversified Realty Corp. (DDR), a leading real estate investment trust (REIT), has recently refinanced two senior revolving credit facilities in two separate transactions to strengthen its liquidity and reduce its refinancing risks. Both the new revolving credit facilities are currently priced at LIBOR plus 275 basis points.

Developers Diversified has replaced a $1.25 billion credit facility maturing in June 2011 with a new $950 million unsecured facility provided by J.P. Morgan Securities LLC, a division of JPMorgan Chase & Co. (JPM), and Wells Fargo Securities, LLC, part of Wells Fargo & Company (WFC). The new facility has an uncommitted accordion feature to increase the credit facility to $1.2 billion and matures in February 2014.

The company also obtained a new $65 million unsecured revolving credit facility, which replaced its $75 million facility maturing in June 2011. The credit facility also matures in February 2014. In addition, Developers Diversified modified its secured term loan, to conform to the amended covenants in the new unsecured revolving credit agreements. The term loan is priced at LIBOR plus 120 basis points and matures in February 2012.

Developers Diversified acquires, owns, develops, redevelops, leases and manages shopping centers and business centers. The company owns and manages 590 retail operating (including joint ventures) and development properties spanning approximately 134 million square feet of real estate in 42 states in the U.S., Puerto Rico, Braziland Canada.

We maintain our Neutral rating on Developers Diversified for the long term. The company presently has a Zacks #3 Rank, which translates into a short-term “Hold” recommendation.