Regency Centers Offers Senior Notes - Analyst Blog

Regency Centers Corp. (REG), a leading operator and developer of grocery-anchored and community shopping centers across the U.S., has recently announced an offer to sell $250 million worth of senior unsecured notes due April 2021. The notes are priced at 99.86% of par value with a coupon of 4.8%.

The 10-year unsecured notes are scheduled to mature on April 15, 2021, with interest payable in April and October every year. Wells Fargo Securities LLC, part of Wells Fargo & Company (WFC), and J.P. Morgan Securities LLC, the investment banking division of JPMorgan Chase & Co. (JPM), are acting as joint book-running managers for the offering.

Regency Centers intends to utilize the proceeds of the offer to repay debt under its unsecured revolving credit facility and for other general corporate purposes. The company maintains a conservative capital structure and follows a self-funding capital strategy to fund its growth, which includes disposal of non-strategic assets and a continued focus on industry-leading co-investment partnership programs.

Regency Centers seeks to own assets in high-income in-fill markets that are tenanted by market-dominant grocers, category-leading anchors, specialty retailers and restaurants. As of June 30, 2010, Regency Centers owned 398 retail properties, including properties held in joint ventures, spanning 53.1 million square feet.

The company’s dominant anchor tenants are grocery stores, which are not as adversely affected during a recession. Consequently, Regency Centers has a relatively steady source of revenues. We maintain our long-term Neutral recommendation on Regency Centers, which currently has a Zacks #3 Rank that translates into a short-term ‘Hold’ rating.