Donahue Schriber Completes $1.2 Billion Recapitalization

COSTA MESA, Calif.--(BUSINESS WIRE)--Costa Mesa-based shopping center developer Donahue Schriber announced it has successfully completed the final piece of a $1.2 billion balance sheet recapitalization. The recapitalization occurred through several transactions. The final piece was a $365 million refinance with a bank syndicate led by Bank of America and also included Wells Fargo Bank, U.S. Bank, PNC Bank, Union Bank and City National Bank.

“We’re very pleased to continue our strong relationship with Donahue Schriber. They are a solid company with a bright future.”

The loan refinances a portfolio of 31 of Donahue Schriber Realty Group’s assets encompassing grocery-anchored and power centers across California, Arizona, Oregon and Nevada. The new financing has a term of five years with a built-in option for a two-year extension, a lower interest rate and eliminates many restrictive covenants. Utilizing assistance from Chatham Financial, the Company also locked in a LIBOR swap of $255 million as a hedge against potential rising interest rates. The transaction results in an annual interest savings in excess of $6 million. Craig Zarro of Preferred Capital Advisors based in Sacramento, California, served as advisor on behalf of Donahue Schriber.

In addition, the Company’s major investors, the New York State Teachers’ Retirement System and the J.P. Morgan Chase Bank Strategic Property Fund, converted their $188 million of preferred stock and accrued dividends into shares of common stock. They have also committed to provide the Company $100 million of additional common capital for future growth opportunities. Included in the recapitalization total is the $248,545,000 ten-property refinance with Allstate Life Insurance Company that closed May 31, 2011.

The recapitalization is described by Donahue Schriber Chairman and CEO Patrick S. Donahue as one of the most important events in the Company’s 42-year history. “The Bank of America loan restructure is the last big piece of putting the Company’s balance sheet in order, securing our position as a leader in the retail real estate industry. We could not have done any of this without the confidence and support of our Major Shareholders, NYSTRS and J.P. Morgan Strategic Fund. We’re grateful to them, to Bank of America and to the other banks in the syndication that share our vision,” stated Mr. Donahue.

Bank of America Market President and Region Executive Allen Staff Jr. said, “We’re very pleased to continue our strong relationship with Donahue Schriber. They are a solid company with a bright future.”

Bank of America and its predecessor banks have been the leading financial partner since the formation of Donahue Schriber’s private REIT (Real Estate Investment Trust) in 1997.

About Donahue Schriber

Donahue Schriber has been involved in nearly 32 million square feet of retail properties within its 42-year history. Structured as a private REIT (Real Estate Investment Trust), the firm owns and/or operates a portfolio of 81 neighborhood, community, community lifestyle and power shopping centers representing over 12 million square feet throughout California, Nevada, Arizona and Oregon. For more information about the company, visit its website at http://www.donahueschriber.com.

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