Bon-Ton further amends loan & security agreement
York, Pa. – Bon-Ton Stores has entered into an amendment to the company’s existing $675 million asset-based revolving credit facility that was scheduled to mature in March 2016. Bank of America, N.A. continues to serve as Agent on the credit facility.
The second amendment extends the maturity date of the commitments under the credit facility to Dec. 12, 2018. The amendment provides interest rate reductions and generally favorable revisions regarding the facility requirements.
“We are very pleased with the enhancements made to our facility, which we believe position us well for the future,” said Keith Plowman, executive VP and CFO. “We appreciate the strong level of support from our lending group of bank institutions.”
ABC Supply fills CIO spot
ABC Supply has named Tony Vaden as chief information officer. He replaces Kathy Hendricks, who moved to a newly created post as executive director of customer connectivity for ABC Supply.
Vaden is an award-winning veteran of the information technology industry, and he will oversee all aspects of the information technology systems that support the company’s computing needs.
He joins ABC Supply from American Tire Distributors (ATD) where he had been chief information officer. ATD is the largest tire and wheel distributor serving retail tire dealers in the United States and Canada. Previously, Vaden had held senior technology positions at Solectron (now a subsidiary of Flextronics), Dell and AMP (now TE Connectivity).
ABC Supply operates 450 branches in 45 states.
Simon to spin off strip centers and smaller malls
Indianapolis — Simon Property Group has announced a plan to spin off all of its strip center business along with its smaller enclosed malls into an independent publicly traded REIT called SpinCo.
SpinCo will own stable, quality strip centers and malls. The new company will initially own or have an interest in 54 strip centers and 44 malls. Each of the malls will generate annual net operating income of approximately $10 million or less. Simon estimates that SpinCo’s initial year NOI will exceed $400 million. The estimate for funds from operations in the new company’s initial year is approximately $300 million or $0.80 per share.
SpinCo will operate one of the largest, most diversified portfolios of strip centers and malls in the U.S., with 53 million sq. ft. in 23 states. As of September 30, 2013, the new REIT’s occupancy rate is 94.2% for strip centers and 90.4% for malls.
The new company, which will have an independent, dedicated executive management team and conservatively capitalized balance sheet, will be positioned to deliver internal growth through active asset management and re-developments and external growth through acquisitions and selective new developments. SpinCo intends to pursue an investment grade credit rating from the major credit rating agencies.
With one of the largest, most diversified portfolios of strip centers and malls in the United States, SpinCo’s scale and flexible balance sheet will provide the ability to acquire additional assets.
An independent management team and a board consisting of a majority of independent directors will lead SpinCo. Richard Sokolov, SPG’s president and COO and member of Simon’s Board of Directors, will become chairman of the board of directors, SpinCo.
David Simon, Chairman and CEO of SPG will also serve as a director of SpinCo. SPG’s strip center management team and personnel will become employees of SpinCo, and SpinCo malls will continue to receive property management services from Simon. SPG will provide support functions for SpinCo on a transitional basis.
The spin-off will producer higher sales per square foot, NOI growth and occupancy for SPG, while maintaining the company’s conservative leverage profile and a portfolio of high-quality assets. SPG does not expect any change to its credit rating or outlook.
Simon’s current annualized dividend of $4.80 per share will be maintained. The company expects the dividend to continue to grow in line with the company’s funds from operations and taxable income.
SpinCo’s initial year dividend is estimated to be at least $0.50 per share, which is approximately 100% of estimated taxable income.
A pro rata special distribution to Simon shareholders will create the spin-off. Simon Property Group’s limited partnership unit-holders will receive units of SpinCo’s operating partnership subsidiary. SPG will file the initial Form 10 information statement relating to the spin-off with the U.S. Securities and Exchange Commission ("SEC") before the end of 2013. The company expects the distribution to be completed in the second quarter of 2014.
The transaction is subject to certain conditions, including declaration by the SEC that SpinCo’s registration statement is effective, filing and approval of SpinCo’s listing application, customary third party consents, and formal approval and declaration of the distribution by Simon’s Board of Directors. SPG may, at any time and for any reason until the proposed transaction is complete, abandon the separation or modify or change its terms.
BofA Merrill Lynch and Goldman, Sachs & Co. are serving as exclusive financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Simon in connection with the proposed transaction.
SPG held a conference call to discuss the transaction at 9 a.m. Eastern Time today. Live streaming audio of the conference call will be accessible at investors.simon.com. An online replay will be available until December 27, 2013 at Investors.simon.com.