Back to top

Analyst Blog

Zacks Equity Research

Simon Property (SPG) to Sell Senior Notes Totaling $1.85B

SPG ARE CUBE SRG

Trades from $3

Simon Property Group Inc. (SPG - Free Report) , the Indianapolis, IN-based retail real estate investment trust (“REIT”), has agreed to sell three tranches of senior notes totaling $1.85 billion. This is likely to add further flexibility to its already sturdy financial position.

Subject to the fulfillment of certain customary closing conditions, the offering is likely to close on Nov 23, 2016. The three tranches comprise $550 million principal amount bearing a rate of 2.35%, $750 million principal amount bearing a rate of 3.25% and $550 million principal amount with a rate of 4.25%.

Simon Property is engaged in acquiring, owning and leasing a diverse portfolio of shopping malls. The company plans to utilize the net proceeds derived from this offering for partial repayment of outstanding borrowing under its $3.5 billion unsecured supplemental revolving credit facility and for some planned optional redemptions.

On Oct 26, Simon Property reported third-quarter 2016 funds from operations (“FFO”) of $2.70 per share, up from the year-ago quarter tally of $2.54. The Zacks Consensus Estimate for the quarter was $2.68. Growth in operating income and transformative redevelopments aided the results.

Currently, Simon Property has a Zacks Rank #3 (Hold). Over the past seven days, its current quarter FFO estimate has remained unchanged at $2.89.

Some better-ranked stocks in the same space include Seritage Growth Properties (SRG - Free Report) , Alexandria Real Estate Equities, Inc. (ARE - Free Report) and CubeSmart (CUBE - Free Report) . While Seritage Growth Properties sports a Zacks Rank #1 (Strong Buy), both Alexandria Real Estate Equities and CubeSmart carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Seritage Growth Properties’ current quarter have moved up 1.7% over the past one month to 59 cents.

Current quarter estimates for Alexandria Real Estate Equities and CareTrust REIT remained unchanged at $1.43 and 37 cents, respectively over the past month.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>