Retail Properties of America, Inc. (NYSE: RPAI or the “Company”) announced today the pricing of an underwritten public offering of 5,000,000 shares of newly issued 7.00% Series A Cumulative Redeemable Preferred Shares (“Preferred Stock”) at a price of $25 per share, resulting in gross proceeds of $125.0 million. The Company estimates that the net proceeds, after deducting the underwriting discount and before other estimated offering expenses, will be approximately $121.1 million. The Company has granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of its 7.00% Series A Cumulative Redeemable Preferred Shares to cover over-allotments, if any.
The Company intends to use net proceeds to repay outstanding borrowings under two mezzanine loans, scheduled to mature on December 1, 2019, with outstanding principal balances as of December 3, 2012 of $85.0 million and $40.0 million and fixed interest rates of 12.24% and 14.00%, respectively. The mezzanine loans can be prepaid beginning in February 2013 for a prepayment fee of 5.00%. Remaining net proceeds, if any, will be used for working capital and other general corporate purposes.
The offering is expected to close on or about December 20, 2012, subject to customary closing conditions. RPAI intends to apply to list the Preferred Stock on the New York Stock Exchange under the symbol "RPAI PrA".
Wells Fargo Securities and Citigroup served as joint book-running managers for the offering; Jefferies and RBC Capital Markets served as joint lead managers; and Deutsche Bank Securities, KeyBanc Capital Markets, and Scotiabank served as co-managers for the offering.An automatic shelf registration statement with respect to this offering was previously filed with the Securities and Exchange Commission on November 6, 2012. A prospectus supplement relating to the offering has been filed with the Securities and Exchange Commission. A copy of the prospectus supplement and the accompanying prospectus relating to these securities may be obtained, when available, by contacting Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (tel: 800-831-9146) or email: email@example.com; or Wells Fargo Securities, LLC, 1525 West W.T. Harris Blvd., NC0675, Charlotte, NC 28262, Attn: Capital Markets Client Support, telephone: (800) 326-5897, email: firstname.lastname@example.org. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or 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 jurisdiction.