Maguire Properties (MPG) Extends Debt Maturity on Construction Loan and Settles Swap Obligation
Maguire Properties, Inc. (NYSE: MPG) today announced that it has extended the debt maturity on a construction loan for the Lantana Media Entertainment Campus located in Santa Monica, California.
The outstanding balance of the loan as of the extension date was approximately $84 million and the new maturity date is September 30, 2009. We are able to further extend the maturity date of this loan to June 13, 2010, subject to certain conditions. No principal paydown was made in connection with the extension of this loan.
We hold a forward-starting interest rate swap that was purchased to hedge the interest rate on permanent financing for our Lantana Media Campus construction loan. This swap had a mandatory early termination date of September 19, 2009. As of March 31, 2009, the termination value of the swap was a liability of $22.9 million. We recently reached an agreement with our counterparty to terminate the swap for $11.3 million as a result of recent movement in treasury rates, one-half of which was paid during June 2009 while the other half will be paid during July 2009.
President and Chief Executive Officer Nelson Rising commented, "Given continued lending challenges facing the industry we are pleased to extend this loan and are quite satisfied to terminate the swap agreement with more favorable results. The Company continues its focus on addressing its liquidity issues, near-term debt maturities and improving the occupancy level of its portfolio. The previously announced disposition of 3161 Michelson was another significant event in that it eliminated the project loan and a number of master lease obligations."
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