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PREIT
[GRAPHIC OMITTED] NEWS
FOR RELEASE:
Pennsylvania Real Estate Investment Trust
200 South Broad Street
Philadelphia, PA 19102
www.preit.com
Phone: 215-875-0700
Fax: 215-546-7311
FOR FURTHER INFORMATION:
AT THE COMPANY
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Edward A. Glickman
Executive Vice President and CFO
(215) 875-0700
AT THE FINANCIAL RELATIONS BOARD
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Joe Calabrese Georganne Palffy Judith Sylk-Siegel
(General Info) (Analyst Info) (Media Info)
(212) 661-8030 (312) 266-7800 (212) 661-8030
FOR IMMEDIATE RELEASE
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January 4, 2001
Pennsylvania Real Estate Investment Trust Announces Closing of
$250 Million Combined Credit and Construction Facility
Long-Term Financing Facilitates Development Program
Philadelphia, PA, January 4, 2001 - Pennsylvania Real Estate Investment Trust
(NYSE: PEI) announced today that it has completed the refinancing of its line of
credit with a new $250 million combined revolving credit and construction
finance facility led by Wells Fargo Bank National Association. The facility
combines a $175 million revolving credit facility with a $75 million two-year
construction finance facility. The revolving credit facility replaces a $150
million line of credit, which had approximately $108 million in outstanding
borrowings.
The new revolving credit facility has a term of three years, bears interest at
between 1.3% and 1.8% over LIBOR and is secured initially by a portfolio of 10
of the Company's existing retail and industrial properties. The facility
contains covenants and agreements which affect, among other things, the amount
of permissible borrowings and other liabilities of the Company. The initial term
of the revolving credit facility may be extended for an additional year if
agreeable to the lenders or, alternatively, may be converted by the Company into
a two-year amortizing term loan at the beginning of the third year. In addition,
properties financed under the construction facility may join the collateral pool
for the revolving credit facility upon their completion. The construction
facility represents a new financing vehicle for the Company and is aimed at
shopping center development projects in the predevelopment stage. Presently, the
Company has four properties in predevelopment with a projected aggregate cost of
approximately $70 million and gross leasable space of approximately 1.2 million
square feet. The inclusion of the construction line in the single facility with
the same lenders and pre-agreed documentation is expected to enable the Company
to expedite substantially the availability of development financing and lead to
more rapid completion schedules.
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Commenting on the financing, Ron Rubin, Chief Executive Officer of PREIT, said,
"This new bank agreement provides the Company with additional financial
flexibility to complete various development and redevelopment projects as well
as pursue other strategic opportunities that may arise. With all of our
development projects being tenant-driven, PREIT's long-term success and
profitability depends on being responsive to their needs. This credit facility,
when combined with the Company's expected financial performance in 2001 and
resulting free cash flow generation, is expected to produce sufficient funds to
allow PREIT to continue its recent track record of successful development for
major retail tenants."
During the two-year term of the construction facility, up to $75 million can be
borrowed against new development projects. Each borrowing under that facility
will be in the form of a separate construction loan that will mature in 2 years
from closing of the specific loan. In the event that PREIT does not use the
entire facility for new development projects, up to $25 million can be converted
by the Company into additional availability under the revolving credit facility.
The new facility is led by Wells Fargo Bank National Association as
administrative agent, and includes U.S. Bank National Association, Manufacturers
&Traders Trust Company, Fleet National Bank, Summit Bank, Wilmington Trust
Company, FirstTrust Bank, Sovereign Bank and Commerce Bank, N.A. Each bank will
participate on a pro rata basis in both the revolving credit facility and the
construction loan facility.
Ed Glickman, the Company's Chief Financial Officer, commented, "We believe this
new facility reflects PREIT's strong operational and financial performance over
the last several years and the confidence and support of the banking community.
The rate, terms and conditions offered by our bank syndicate, led by Wells
Fargo, presented an excellent opportunity to provide continued financial support
for the Company's core development business. In particular, the new facility
provides PREIT with an end-to-end financing solution by providing funding for
our development transactions from their initiation, through the construction
phase and back to the revolver for additional borrowing capacity as completed
assets. We look forward to a long and successful relationship with Wells Fargo
and a group of banks with experience and sophistication in the real estate
market."
Three Year $75 Million Interest Rate Swap Transactions
In anticipation of the new credit facility, in early December, the Company
entered into two three-year interest rate swap agreements covering a notional
$75 million. Under the swap agreements the Company agreed to pay a blended fixed
rate of approximately 6% against the receipt of one-month LIBOR. The swap
counter parties were Fleet Bank and Wells Fargo. These agreements complement the
Company's existing $20 million interest rate swap agreement, which expires in
June 2001, under which the company pays 6.12% fixed against the receipt of
one-month LIBOR. Chatham Financial Corporation advised the Company on the swap
transaction.
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 shopping centers
(approximately 9.8 million square feet) and apartment communities (7,242 units)
located primarily in the eastern United States. The Company's portfolio
currently consists of 45 properties in 10 states. In addition, there are 6
retail properties under development, which will add approximately 3.0 million
square feet to the portfolio. Pennsylvania Real Estate Investment Trust is
headquartered in Philadelphia, Pennsylvania.
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The matters discussed in this report, as well as news releases issued from time
to time by PREIT include use of forward-looking terminology such as "may,"
"will," "should," "expect," "anticipate," "estimate," "plan," or "continue" or
the negative thereof or other variations thereon, or comparable terminology
which constitute "forward-looking statements." Such forward-looking statements
(including without limitation, information concerning PREIT's continuing
dividend levels, planned acquisition, development and divestiture activities,
short- and long-term liquidity position, ability to raise capital through public
and private offerings of debt and/or equity securities, availability of adequate
funds at reasonable cost, revenues and operating expenses for some or all of the
properties, leasing activities, occupancy rates, changes in local market
conditions or other competitive factors) involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of PREIT's results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. PREIT disclaims any obligation to update any such
factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
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To receive additional information on Pennsylvania Real Estate Investment Trust
via fax at no charge, please dial 1-800-PRO-INFO and enter the
ticker symbol PEI.
