ATLANTA, GA--(BUSINESS WIRE)-- Post Properties, Inc. (NYSE: PPS) (the “Company”), an Atlanta-based real estate investment trust, announced that certain wholly-owned subsidiaries (the “Borrowers”) of its operating partnership, Post Apartment Homes, L.P., prepaid the aggregate outstanding principal amount of approximately $184.7 million on six multi-family fixed rate notes with the Federal Home Loan Mortgage Corporation.
The notes were secured by mortgages on six properties located in Atlanta, GA, Charlotte, NC, and Dallas, TX. The notes required fixed interest-only payments at 6.09% and would have matured on November 1, 2014.
The Borrowers also paid an aggregate $6.2 million prepayment premium in connection with the prepayment of the notes.
The Operating Partnership used $135 million of borrowings under its existing $300 million unsecured revolving line of credit and available cash to finance the prepayment of the notes and the payment of the related prepayment premium.
Such line of credit borrowings will bear interest at a rate of LIBOR plus 2.30%. The Operating Partnership intends to refinance the amounts drawn under its revolving credit facility with an unsecured long-term bank financing during the first quarter of 2012.
The Company expects to record a loss on debt extinguishment of approximately $7.0 million, or approximately $0.13 per diluted share, in the fourth quarter of 2011 in connection with the prepayment premiums incurred and the write off of related unamortized deferred financing costs.
This charge was not included in the Company’s previously reported Funds from Operations earnings guidance.
Said Chris Papa, Executive Vice President and Chief Financial Officer of the Company, “The prepayment of these notes and our anticipated unsecured long-term bank financing in the first quarter of 2012 is consistent with our strategy of reducing secured debt levels and borrowing costs over time and refinancing our near term debt maturities.
“ In that regard, we were pleased that Moody’s Investor Service last week affirmed the Company’s senior unsecured credit rating of Baa3, and revised the Company’s outlook to positive from stable, reflecting the improvements that the Company has made to its credit profile.”
Contact:
Post Properties, Inc.
Chris Papa, 404-846-5000
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