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WRI Prices Notes to Pay Off Debt

Zacks Equity Research

In order to diminish its outstanding debts, recently, Weingarten Realty Investors (WRI) priced an underwritten public offering of senior unsecured notes worth $250 million at 99.583% of the principal amount. The offering of the notes, which has a yield to maturity of 4.499%, is slated to close on Oct 15, subject to customary closing conditions.

In particular, this Houston-based retail real estate investment trust (:REIT) plans to use a part of the garnered proceeds to pay-off the outstanding debt under its unsecured revolving credit facility. Moreover, Weingarten Realty intends to utilize the remaining proceeds to repay future debt maturities, invest in short-term instruments and for meeting other corporate needs.

Notably, a consortium of leading financial institutions assisted Weingarten Realty in this offering, with J.P. Morgan Securities LLC of JPMorgan Chase & Co. (JPM), Wells Fargo Securities, LLC of Wells Fargo & Company (WFC) and RBC Capital Markets, LLC of Royal Bank of Canada (RY) acting as the joint book-running managers.

We expect this notes offering to help Weingarten Realty attain financial flexibility and position it favorably to pursue portfolio repositioning activities, which will go a long way in enhancing its top line. Significantly, as of Jun 30, 2013, Weingarten Realty has interests in 281 shopping centers located in 21 states of the U.S.

Notably, the company is scheduled to release its third-quarter 2013 results on Oct 31, 2013, after the closing bell. The Zacks Consensus Estimate for 2013 recurring funds from operations (:FFO) per share is pegged at 48 cents, reflecting a year-over-year increase of 6.06%.

Weingarten Realty currently carries a Zacks Rank #3 (Hold).

Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.

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