NIS 378,000,000 principal amount of Series E debentures at the price of NIS 1,053 per unit (each unit comprised of NIS 1,000 principal amount), representing an effective interest rate
Lower average outstanding borrowings and a lower annualized effective interest rate
resulted in reduced interest expense for the quarter.
In anticipation of the offering, the Company entered into hedge transactions based on then existing Treasury rates which had the effect of reducing the Company's effective interest rate
cost on the Notes to approximately 6.
Because of market conditions, the effective interest rate
on the bonds is slightly higher than previously estimated.
If the impact of these settlements were applied to the notes, the effective interest rate
of the 2011 notes and the 2017 notes would be 5.
Average outstanding borrowings for the quarter were approximately $9,843,000 lower than the prior year period while the annualized effective interest rate
on these borrowings was 60 basis points higher in the current year period.
The Revolver bears interest at LIBOR plus 55 basis points (based on the Company's current credit ratings) and incurs an annual facility fee of 15 basis points, resulting in an aggregate 15 basis point reduction in the effective interest rate
of the Revolver.
If the proceeds of these settlements were applied to the notes, the effective interest rate
of the 2012 notes and the 2016 notes would be reduced to 5.
Ultimately, the effective interest rate
on the Company's 2008 debt issuances will depend on the credit spreads in effect at that time, among other factors.
Additionally, the company announced it had entered into an amendment to its $120 million line of credit, primarily reducing the effective interest rate
from LIBOR plus 3.
The new 10-year, $400 million first mortgage carries an effective interest rate
of approximately 5.
This loan is secured by four properties and is for a five-year term at an effective interest rate
Although the effective interest rate
on the Notes is higher than the interest rate on the paid-off term loans, sale of the Notes and the new revolving credit facility have enabled the Company to realize greater short- term liquidity and flexibility in its debt structure.
NYSE:ELS) today announced it has completed the previously announced refinancing of approximately $293 million of secured debt maturing in 2007 with an effective interest rate