PREIT announces plans for $360m in financing.Pennsylvania Real Estate Investment Trust The Pennsylvania Real Estate Investment Trust (NYSE: PEI) is one of the first publicly traded real estate investment trusts, established in 1960 by Sylvan M. Cohen (died September 8, 2001). The PREIT corporate offices are located in Philadelphia, Pennsylvania. announced that it has received commitments for a $200 million first mortgage loan from Prudential Mortgage Capital Company and Northwestern Mutual. The loan, which will be secured by Cherry Hill Mall in Cherry Hill, New Jersey, will have an interest rate of 5.42% and will mature in October 2012. PREIT PREIT Pennsylvania Real Estate Investment Trust will have the ability to convert this mortgage loan to a senior unsecured loan Unsecured Loan A loan that is issued and supported only by the borrower's creditworthiness, rather than by some sort of collateral. Notes: Generally, a borrower must have a high credit rating to receive an unsecured loan. under prescribed conditions, including the achievement of a specified credit rating. PREIT expects to close this financing in October 2005. A portion of the loan proceeds will be used to repay the existing mortgage, which PREIT assumed in connection with the purchase of Cherry Hill Mall in 2003. The existing loan has an interest rate of 10.6% and will have a balance of approximately $70 million at the anticipated repayment date. PREIT also announced that it has signed an application for a $160 million first mortgage loan from Prudential Mortgage Capital Company and another institutional lender. This loan, upon closing, will be secured by Willow Grove Park Willow Grove Park was an amusement park located in Willow Grove, Pennsylvania (the part which is in Abington Township) that operated for eighty years from 1896 through the 1975 season. in Willow Grove, Pennsylvania Willow Grove is a census-designated place (CDP) in Montgomery County, Pennsylvania, about 10 miles north of Philadelphia. The population was 16,234 at the 2000 census. It is the home of the Naval Air Station Willow Grove. . The loan will bear interest at an annual rate of 5.65% and will mature in December 2015. This financing is expected to close in December 2005. A portion of the loan proceeds will be used to repay the existing first mortgage loan on Willow Grove Park, which has an interest rate of 8.39% and will have a balance of approximately $108 million at closing. Robert McCadden, Chief Financial Officer of PREIT, commented, "The completion of both of these transactions will generate approximately $182 million of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to repay borrowings under our Credit Facility and will provide us with additional liquidity to fund investment opportunities and for other corporate purposes.." |
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