Simon Property Group Sells $1.5 Billion of Senior Notes

Rhea-AI Summary

Simon Property Group (NYSE:SPG) has announced the sale of $1.5 billion in senior notes through its operating partnership subsidiary. The offering consists of $700 million in 4.375% Notes due 2030 and $800 million in 5.125% Notes due 2035.

The notes have a weighted average term of 7.8 years and a weighted average coupon rate of 4.775%. The proceeds will primarily be used to repay the $1.1 billion of 3.500% notes due September 2025, with remaining funds allocated for general corporate purposes. The offering is expected to close on August 19, 2025.

Positive

• Successful placement of $1.5B in senior notes demonstrates strong market confidence
• Extended debt maturity profile with 7.8-year weighted average term
• Strategic refinancing of upcoming $1.1B debt maturity in September 2025

Negative

• Higher interest costs with new notes (4.775% weighted average) compared to maturing notes (3.500%)
• Maintains substantial indebtedness level as noted in risk factors

Insights

Corporate Finance Expert

Simon Property Group's $1.5B debt refinancing improves maturity profile with higher interest costs reflecting current rate environment.

Simon Property Group is executing a $1.5 billion debt refinancing transaction through two senior notes offerings: $700 million of 4.375% notes due 2030 and $800 million of 5.125% notes due 2035. This strategic refinancing achieves several key financial objectives for the retail REIT. First, it proactively addresses the upcoming $1.1 billion 3.5% notes maturity in September 2025, eliminating near-term refinancing risk. Second, it extends the company's weighted average debt maturity profile to 7.8 years for these particular obligations.

However, the refinancing comes at a cost in today's higher interest rate environment. The new weighted average coupon rate of 4.775% represents a significant 1.275% increase over the maturing 3.5% notes. On the $1.1 billion portion being refinanced, this translates to approximately $14 million in additional annual interest expense, which will modestly impact funds from operations.

While costlier, this refinancing demonstrates Simon's continued strong access to capital markets, with four major financial institutions serving as joint book-runners. The company's decision to extend maturities despite higher rates suggests management believes current interest rates may remain elevated or potentially increase further. This transaction strengthens Simon's liquidity position and debt maturity schedule, providing greater financial flexibility as the retail real estate sector navigates economic uncertainties, inflation pressures, and evolving consumer behaviors mentioned in their forward-looking statements.

INDIANAPOLIS, Aug. 12, 2025 /PRNewswire/ -- Simon^®, a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations, announced today that its majority-owned operating partnership subsidiary, Simon Property Group, L.P. (the "Operating Partnership"), has agreed to sell:

• $700.0 million aggregate principal amount of its 4.375% Notes due 2030, and
• $800.0 million aggregate principal amount of its 5.125% Notes due 2035.

Combined, the two new issues of senior notes have a weighted average term of 7.8 years and a weighted average coupon rate of 4.775%. The offering is expected to close on August 19, 2025, subject to the satisfaction of customary closing conditions.

The Operating Partnership intends to use the net proceeds of the offering to repay all or a portion of its $1.1 billion outstanding principal amount of 3.500% notes due September 2025 at maturity, and to use any remaining net proceeds for general corporate purposes, including to repay other unsecured indebtedness.

BBVA Securities Inc., J.P. Morgan Securities LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC are serving as joint book-running managers of the public offering, which is being conducted under the Operating Partnership's shelf registration statement filed with the Securities and Exchange Commission. Any offer of securities will be made by means of the prospectus supplement and accompanying prospectus.

You may get these documents for free by visiting EDGAR on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, when available, copies of the prospectus supplement and accompanying prospectus can be obtained by contacting: BBVA Securities Inc., Two Manhattan West, 375 9th Avenue, 9th Floor, New York, New York 10001, Attention: US Debt Capital Markets, email: ny.dcmoriginationus.group@bbva.com, telephone toll-free at 1(800) 422-8692; J.P. Morgan Securities LLC, 383 Madison Avenue, New York, NY 10179, Attention: Investment Grade Syndicate Desk, 3rd Floor, telephone collect at (212) 834-4533; TD Securities (USA) LLC, telephone toll-free at 1(800) 495-9846; and Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, Minnesota 55402, Attention: WFS Customer Service, email at wfscustomerservice@wellsfargo.com, telephone toll-free at 1(800) 645-3751.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Forward-Looking Statements

Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although Simon Property Group, Inc. (the "Company") believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained, and it is possible that the Company's actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the intensely competitive market environment in the retail industry, including e-commerce; the inability to renew leases and relet vacant space at existing properties on favorable terms; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; the potential loss of anchor stores or major tenants; an increase in vacant space at our properties; the loss of key management personnel; changes in economic and market conditions that may adversely affect the general retail environment, including but not limited to those caused by inflation, the impact of tariffs and global trade disruptions on us to the extent impacting our tenants, recessionary pressures, wars, escalating geopolitical tensions as a result of the war in Ukraine and the conflicts in the Middle East, and supply chain disruptions; the potential for violence, civil unrest, criminal activity or terrorist activities at our properties; the availability of comprehensive insurance coverage; security breaches that could compromise our information technology or infrastructure; changes in market rates of interest; our international activities subjecting us to risks that are different from or greater than those associated with our domestic operations, including changes in foreign exchange rates; the impact of our substantial indebtedness on our future operations, including covenants in the governing agreements that impose restrictions on us that may affect our ability to operate freely; any disruption in the financial markets that may adversely affect our ability to access capital for growth and satisfy our ongoing debt service requirements; any change in our credit rating; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; the inability to lease newly developed properties on favorable terms; risks relating to our joint venture properties, including guarantees of certain joint venture indebtedness; reducing emissions of greenhouse gases; environmental liabilities; natural disasters; uncertainties regarding the impact of pandemics, epidemics or public health crises, and the associated governmental restrictions on our business, financial condition, results of operations, cash flow and liquidity; and general risks related to real estate investments, including the illiquidity of real estate investments.

The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in subsequent other periodic reports, but except as required by law, the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

About Simon

Simon^® is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.

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SOURCE Simon

FAQ

What is the size and structure of Simon Property Group's new senior notes offering?

Simon Property Group is selling $1.5 billion in senior notes, split between $700 million of 4.375% Notes due 2030 and $800 million of 5.125% Notes due 2035.

How will Simon Property Group (SPG) use the proceeds from the senior notes sale?

The proceeds will be used to repay $1.1 billion of 3.500% notes due September 2025, with remaining funds used for general corporate purposes and other debt repayment.

What is the weighted average interest rate and term for SPG's new senior notes?

The senior notes have a weighted average coupon rate of 4.775% and a weighted average term of 7.8 years.

When will Simon Property Group's new senior notes offering close?

The senior notes offering is expected to close on August 19, 2025, subject to customary closing conditions.

Who are the joint book-running managers for SPG's senior notes offering?

The joint book-running managers are BBVA Securities Inc., J.P. Morgan Securities LLC, TD Securities (USA) LLC, and Wells Fargo Securities, LLC.