What's the deal with this?
https://www.nasdaq.com/articles/vornado-vno-refinances-555-california-street-with-%241.2b-loan-2021-05-13
Vornado Realty Trust VNO completed a $1.2-billion refinancing of 555 California Street. The company owns a 70% controlling stake in the partnership for the ownership of the 1.8 million-sq-ft San Francisco trophy office campus.
The interest-only loan carries an interest rate of LIBOR plus 1.193% for the first five years, after which it will bear interest rates of LIBOR plus 2.18% and LIBOR plus 2.43% in the sixth and seventh years, respectively.
The borrowing replaces a previous $533-million, 5.10% loan, which was slated to mature in September 2021. To better manage its interest-rate risk, Vornado has swapped its share of the loan to a fixed rate of 2.26% for the first three years.
This refinancing offers the company a cheaper line of credit and helps reduce annualized interest expenses. Particularly, given that the locked-in fixed interest rate of 2.26% marks a significant reduction from the prior loan interest rate of 5.10%, the refinancing is likely to result in notable interest expense savings for the company. Also, its share of the net proceeds from this refinancing was nearly $454 million.
The refinanced loan is slated to mature in May 2026, after considering any further extension.
Notably, with the refinancing, the REIT has extended maturities of the assumed debt. This will help it to improve its maturity profile and enjoy greater liquidity for day-to-day operations.
The move will also boost the company’s cash flow and alleviate its bottom-line pressure. The interest expense reduction offers greater financial flexibility and will strengthen Vornado’s balance sheet. Markedly, As of Mar 31, 2021, the company had $1.64 billion of cash and cash equivalents, up from $1.62 billion reported as of Dec 31, 2020.
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The company recently reported first-quarter same-store net operating income growth of 4.7% on a year-over-year basis for 555 California Street. However, occupancy at 555 California Street was 97.8%, down from 99.8% in the prior year.
Shares of this Zacks Rank #3 (Hold) company have gained 11.6% over the past six months compared with the industry's growth of 6.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kind of interesting he has 555 and Jared had 666 5th Ave. Maybe they just give thr best properties digits.
And I think they're 50% graphite after 100,000 years IIRC, so they're not forever.
Nationwide run on toilet paper