PHILADELPHIA--(BUSINESS WIRE)-- Pennsylvania Real Estate Investment Trust (the “Company”) (NYSE: PEI) today announced that it has priced the underwritten public offering of 3,450,000 of its 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares”) at $25.00 per share, plus accrued dividends, if any. The offering is expected to close on October 11, 2012, subject to customary closing conditions. Dividends on the Series B Preferred Shares will be paid quarterly in arrears on the 15th day of each March, June, September and December commencing December 17, 2012 (because December 15, 2012 is not a business day) at a rate of 7.375% annually of the stated liquidation value of $25.00 per share, which is equivalent to $1.84375 per share on an annualized basis.
The estimated net proceeds from the offering are expected to be approximately $83.2 million, after deducting the underwriting discount and our estimated expenses. The Company intends to use the net proceeds from this offering to repay amounts outstanding under the Company’s 2010 Credit Facility and for other general corporate purposes.
The Company intends to file an application to list the Series B Preferred Shares on the New York Stock Exchange. If the application is approved, trading of the Series B Preferred Shares on the New York Stock Exchange is expected to begin within 30 days after the initial issuance of the Series B Preferred Shares. Wells Fargo Securities, LLC, Citigroup and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as joint book-running managers for the offering. J.P. Morgan Securities LLC and Stifel, Nicolaus & Company, Incorporated are acting as joint lead managers for the offering, and Deutsche Bank Securities Inc., Janney Montgomery Scott LLC, Mitsubishi UFJ Securities (USA), Inc., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc. are acting as co-managers for the offering.
A shelf registration statement with respect to this offering was previously filed with the Securities and Exchange Commission and declared effective on January 12, 2012. A preliminary prospectus supplement and related prospectus relating to the offering have been filed with the Securities and Exchange Commission.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The offering may be made only by means of the prospectus supplement and related prospectus. When available, copies of the prospectus supplement and related prospectus for this offering may be obtained by contacting Wells Fargo Securities, LLC at 1525 West W.T. Harris Blvd., NC0675, Charlotte, NC 28262, Attention: Capital Markets Client Support, telephone: 1-800-326-5897 or email: email@example.com; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: 1-800-831-9146 or email: firstname.lastname@example.org; or Merrill Lynch, Pierce, Fenner & Smith Incorporated at 222 Broadway, 7th Floor, New York, NY 10038, attention: Prospectus Department, or email email@example.com.
About Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls. Currently, the Company’s portfolio consists of 49 properties, including 38 shopping malls, eight strip and power centers, and three development properties. The Company’s properties are located in 13 states in the eastern half of the United States, primarily in the Mid-Atlantic region. The operating retail properties have approximately 33 million total square feet of space. PREIT is headquartered in Philadelphia, Pennsylvania. PREIT’s common shares are publicly traded on the NYSE under the symbol PEI.
This press release contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2010 Credit Facility; potential operating losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all, due in part to the effects on us of dislocations and liquidity disruptions in the capital and credit markets; our ability to raise capital, including through the issuance of equity, equity-related and/or debt securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short- and long-term liquidity position; current economic conditions and their effect on employment, consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; the effects of online shopping and other uses of technology on our retail tenants; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. The risks included here are non-exhaustive, and there are additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in the section of our Annual Report on Form 10-K in the section entitled “Item 1A. Risk Factors.” We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
Robert McCadden, 215-875-0735
EVP & CFO
Heather Crowell, 215-875-0735
Source: Pennsylvania Real Estate Investment Trust