PREIT reaches agreement with around 80% of its lenders to recapitalize its business


PHILADELPHIA CREAM, October 14, 2020 / PRNewswire / – PREIT (NYSE: PEI), a leading operator of various retail and experiential destinations, today announced that it has reached an agreement with more than 80% of its bank lenders under which banks will provide a $ 150 million recapitalize the business and extend the Company’s debt schedule, supporting PREIT’s operations and the continued execution of its strategic priorities.

“Long before the COVID-19 pandemic hit, we began to take significant steps to improve the financial and operational health of the company,” said Joseph F. Coradino, CEO of PREIT. “These measures have included proactive asset sales, repositioning and anchor redevelopment to significantly minimize our exposure to underperforming assets, as well as diversifying our tenant base to deliver compelling mass market offerings for buyers while simultaneously improving the underlying credit profile of the company. the next phase of our evolution continues on the path we have set to create diverse multi-use ecosystems in our properties marked by a healthy mix of multi-family housing, health services, distribution centers and other uses, as well than our strong retail, foodservice and entertainment lines. We appreciate the support of our bank lending group, and their collective confidence in our portfolio and the progress we are making in positioning PREIT for long term success. This agreement provides us with the liquidity necessary to be competitive, meet our obligations and continue to provide our tenants, customers and communities with the high quality shopping experience they expect at our properties. “

Under the terms of the agreement, PREIT would have access to $ 150 million new capital to strengthen the business and provide financial flexibility. Specifically, the banks will convert the Company’s existing credit facilities into a $ 150 million first-rate secure facility, a $ 919 million facility consisting of a Senior Secured Term Loan Facility and a Second Senior Secured Term Loan Facility, all of which will have a two-year term with a one-year extension option. The Company’s current pool of unencumbered assets will serve as collateral for the facility and the Company will retain 30% of the proceeds from the sale of non-income producing assets. The deal remains subject to finalization of final documentation and 100 percent approval by the banking group. The Company is working to complete this process by the end of October.

If the Company is unable to secure support from the remaining lenders holding less than 20% of the debt, it may need to complete this restructuring through a pre-defined reorganization under Chapter 11 of the Bankruptcy Code. the United States. The goal of such a process, if any, would be to implement the agreement which already has the support of over 80% of the Company’s bank lenders. As such, the Company expects any prepackaged reorganization process to be expedited and have no impact on shareholders, suppliers and other trade creditors, business partners or other stakeholders, not all of whom would be not affected. The Company will continue to operate normally with a primary focus on the health and safety of its employees, partners, customers and communities.

Coradino concluded: “Given the strong support we have already received from a substantial majority of our lenders, we are confident in our ability to implement the recapitalization agreement quickly and efficiently. We appreciate the support of our bank lenders, tenants and clients, and above all, we are grateful for the continued dedication of our relentless team of associates at PREIT. We are delighted to take another big step forward to position PREIT for an even more successful future. ”

DLA Piper LLP (US) LLP and Wachtell, Lipton, Rosen & Katz act as legal advisers and PJT Partners LP as financial advisor to PREIT.


PREIT (NYSE: PEI) is a publicly traded real estate investment trust that owns and manages innovative properties at the forefront of shaping consumer experiences across the built environment. PREIT’s strong portfolio of carefully selected retail and lifestyle offerings, blended with destination dining and entertainment experiences, is primarily located in densely populated, high-barrier-to-entry markets with a great opportunity to create dynamic multi-use destinations. Further information is available at on Twitter Where LinkedIn.

Forward-looking statements

This press release contains certain forward-looking statements which can be identified by the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “plan”, “intend”, “Power” or similar expressions. 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 expectations and assumptions about our business, the economy and other future events and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary significantly depending on the risks, uncertainties and changes in circumstances that may affect our operations, markets, services, prices and other factors, as indicated in the Risk Factors section of our other documents filed with the Company. Securities and Exchange Commission. Although we believe that our assumptions are reasonable, we recommend that you do not rely on forward-looking statements because it is very difficult to predict the impact of known factors and it is impossible for us to anticipate all the factors that could affect our actual results. . Important factors that could cause actual results to differ materially from those of forward-looking statements include, but are not limited to, the ability to confirm and implement a reorganization plan in accordance with the terms of the Support Agreement. restructuring (the “RSA”) we have entered into; the risks inherent in the bankruptcy process, including our ability to obtain court approval with respect to the petitions filed in the Chapter 11 cases contemplated by the RSA (the “Chapter 11 cases”), the results of court decisions and Chapter 11 cases in general and the length of time we may be required to operate in the event of bankruptcy; the effectiveness of all restructuring activities in accordance with the Cases of chapter 11 and any additional strategies we may employ to manage our liquidity and capital resources; actions and decisions of claims rs, regulators and other third parties who have an interest in Chapter 11 affairs, who may interfere with the ability to confirm and complete a reorganization plan; restrictions on us as a result of the terms of any debtor-operator credit facility that we enter into under Chapter 11 cases and restrictions imposed by applicable courts; our ability to meet our revenue forecast and pro forma leverage ratio and generate free cash flow to further reduce our indebtedness; our ability to run our business through the impacts of the COVID-19 pandemic, weakening global economic and financial conditions, changes in government regulations and related compliance and litigation costs and other factors listed in our documents filed with the SEC. In addition, our business could be significantly and negatively affected by changes in the retail and real estate industries, including consolidation and store closings, particularly among key tenants; current economic conditions, including the impact of the COVID-19 pandemic and measures taken by government authorities and other third parties to reduce its spread, and the corresponding effects on tenants’ business performance, outlook, creditworthiness and rental decisions; our inability to collect rent due to tenant bankruptcy or insolvency or otherwise; our ability to maintain and increase the occupancy, sale and rental rates of properties; increases in operating expenses that cannot be passed on to tenants; the effects of online shopping and other uses of technology on our tenant retailers; risks associated with our development and redevelopment activities, including delays, cost overruns and our inability to meet expected occupancy or rental rates; acts of violence in shopping centers, including our properties, or other similar spaces, and the potential effect on traffic and sales; our ability to sell the properties we seek to transfer or our ability to obtain the prices we seek; our substantial debt and liquidation preference of our preferred shares and our high leverage ratio and our ability to remain in compliance with our financial covenants under our credit facilities; our ability to refinance our existing debt when it falls due, on favorable terms or not at all; our ability to raise capital, including through the sale of properties or interests in properties and through the issuance of shares or equity-linked securities if market conditions are favorable; and the potential dilution of any capital raising transaction or other share issuance.

Additional factors that could cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in this document and in the sections entitled “Item 1A. Risk factors ”in our annual report on Form 10- K for the year ended December 31, 2019 and in our quarterly report on Form 10-Q for the completed quarterly period June 30, 2020. We do not intend to update or revise forward-looking statements to reflect new information, future events or otherwise.

Contact the PREIT:
Heather crowell
Executive Vice President, Strategy and Communications
(215) 316-6271
[email protected]

André Siegel / Meaghan Repko
Joele Frank Wilkinson Brimmer Katcher


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