Jackson, Mississippi, January 7, 2008– EastGroup Properties (NYSE-EGP) announced today a new four-year, $200 million unsecured revolving credit facility with a group of seven banks which was arranged by PNC Capital Markets LLC. The interest rate on the facility is based on the LIBOR index and varies according to debt-to-total asset value ratios, with an annual facility fee of 15-20 basis points.
Under this facility, EastGroup’s interest rate is currently LIBOR plus .70% (5.27%) with an annual facility fee of .20%. The line of credit, which matures in January 2012, can be expanded by $100 million and has an option for a one-year extension. This credit facility replaces the expiring three-year $175 million credit facility.
David H. Hoster II, President and CEO of EastGroup, stated, “We are pleased with the quality and depth of our bank group and by the level of loan commitments, which resulted in the facility being oversubscribed. With this new facility, we improved our interest spread by 25 basis points as well as improving many other terms from our previous credit line.
The lead arranger and administrative agent for the credit facility is PNC Bank, which led the strong and diverse syndicate of regionally and nationally focused banks, which includes Regions Bank, SunTrust Bank, Wells Fargo Bank, U.S. Bank, Trustmark National Bank and Bank of America.”
$78 MILLION MORTGAGE LOAN
EastGroup also announced that it has executed an application for a $78 million, non-recourse first mortgage loan secured by properties containing 1.6 million square feet. The loan is expected to close in March 2008 and will have a fixed rate of 5.50%, a seven-year term and an amortization schedule of 20 years. The proceeds of this mortgage will be used to reduce variable rate bank borrowings.
EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona and California. Its strategy for growth is based on its property portfolio orientation toward premier business distribution facilities clustered near major transportation features. EastGroup’s portfolio currently includes 23.7 million square feet with an additional 2.3 million square feet of properties under development.
Certain statements in this release are forward-looking and as such are based upon the Company’s current belief as to the outcome and timing of future events. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the real estate industry and in performance of the financial markets; the demand for and market acceptance of the Company’s properties for rental purposes; the amount and growth of the Company’s expenses; tenant financial difficulties; and general economic conditions, including interest rates, as well as economic conditions in those areas where the Company owns properties, the risks associated with the development of real property, and other risks and uncertainties detailed from time to time in the Company’s SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s results could differ materially from those expressed in the forward-looking statements.
EastGroup Properties, Inc. press releases are available at www.eastgroup.net.