Washington Prime Group Refinances Debt

REIT Washington Prime Group (WPG) has refinanced 4 properties at the rock bottom rate of 3.67%– interest only loan due in 2029. The company paid off a 7.50% coupon note.

It would appear that the press release was squarely aimed at Brad
Thomas who has claimed the company has little access to low cost capital.

We only mention this because the company has 2 preferred issues outstanding with current yields of around 8.50%. These issues can be seen here. These are not in our personal wheelhouse–but for the more adventuresome maybe there is opportunity.

The company press release can be read here.

5 thoughts on “Washington Prime Group Refinances Debt”

  1. I thought Thomas was infallible! Not so much but I think he thinks he is.

    So glad I never backed up the truck on Tanger, among others.

  2. Tim… a while back you seemed disinterested in split investment grade COF/PRI @ 5%…trading around 25.06 today…was surprised as some of the other preferreds discussed over past month on this page were split grade or worse and some had single digit stock prices…any thoughts?

  3. Thanks for the update Tim. While I don’t like the mall sector, the open-air properties clearly have value and can be used for other purposes than retail clothing stores. The CEO is very colorful and I also believe the press release was aimed at BT.
    Besides their preferred issues, the company also has two corporate bonds that are trading. CUSIP 939648AE1 is rated Ba2/BB+, matures in August 2024, coupon rate of 6.45%. Vanguard has these bonds at an ask price of 98.45 for a yield to call of 6.829%.

    1. There are basically 5 Mall eREITS. When I subscribed to Rida Morwa, he kept on urging his faithful followers “CBL common and CBL-D, BUY more when the price falls. Market has failed to detect value.” One person asked “I have no more money to buy more, what should I do?” in chat room. One person advised the poor guy “you do not have to buy more, Rida has not pointed a pistol to force you to buy.” I echoed and suggested to buy any of the shipper preferreds.” I bought some WPG myself. Then I read the news that WPG was putting a bid to buy out one of the ancient shoe store chain. I thought that the CEO was out of his mind and took my net loss of WPG common with a quick 15% loss. I do own quite a few shares of WPG-H with relatively low cost basis. CBL has been deemed as the riskiest of 5 Malls. The current CEO, apparently a descendant of the founder, did manage to have all the debts pushed out for 5 years. Last earnings report and call transcript, the future earnings report did not include any of the JC Penney’s store closing. With Forever 21 store closings, it does have more headwinds. I bought 6 bonds of CBL about a year ago to gauge once upon a time way too many shares of CBL-D. The bond got downgraded a month or so ago by SP and Fitch. About 19% unrealized loss probably offset by some interest paid plus accrued interest. PEI (Pa Commercial REITS) is the third Mall with quite a few redeveloped property to A class but with lots of preferreds and debts. I have many of its preferreds plus foolishly bought a small number of commons without realizing that even RIda says SELL. Recently I sold some CTL commons and plowed the proceeds to buy more PEI common. Bad idea. I do not believe that PEI will go BK. MAC is 4th Mall investing in properties co developing with PEI plus some others. One SA article by Mreal suggesting that the new store in Philly will make it whole. Nope. It dropped some more. The last one is Brad Thomas SKT (Tangier Outlook Mall) off on the way to Vegas. I have been to Tangier and seen the trashy Mall with dirty bathrooms. There is another factory outlet near the Tangier with much more traffic from the Chinese tourists buying expensive handbags. I do not have any position on SKT. Rubicon Associates, who now works for BT wrote periodically on CBL-D and CBL-E, obviously attempting not to make BT angry, suggesting that CBL preferreds are risky but probably will not fold. I intend to hold all my positions on Mall. It seems that the private equity money could be working. The Mall dreamers are hoping that Warren Buffett will buy them out. What should he? He owns quite a few years of some eREIT which I do not own. Good balance sheet but low dividend yield.

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