Magazine article American Banker

Morgan Unit Placing $172 Million of Debt Secured by a Shopping Mall in the Midwest

Magazine article American Banker

Morgan Unit Placing $172 Million of Debt Secured by a Shopping Mall in the Midwest

Article excerpt

J.P. Morgan Securities is arranging a private placement of $172 million in debt secured by a Midwest regional shopping mall.

The placement, which was expected to be completed late Tuesday, would be one of the largest sales of debt backed by a single commercial property.

The debt is secured by the Woodfield Mall, a regional shopping center in Schaumburg, Ill., which is owned jointly by Taubman Realty Group and the California Pension Retirement System.

Triple-A Ratings

Both Standard & Poor's Corp. and Duff & Phelps Credit Rating Co. have given the five-year issue triple-A ratings.

The deal is Morgan's second placement of property-backed debt this year. In March, it placed $41 million of debt for Shopping Center Associates, which is managed by the O'Connor Group.

Morgan's real estate finance unit emphasizes investment banking services, although the bank occasionally makes direct real estate loans. Earlier this year, Morgan was one of three banks providing $150 million in credit for the Taubman Group's purchase and expansion of a Short Hills, N.J., shopping center.

Morgan beat out several investment banks to win the placement mandate, said Bernard Winograd, Taubman's chief financial officer.

REIT Investors Hungry

Morgan declined to comment on the deal.

The banking company is said to be marketing the deal to European and U.S. investors.

Investors have snapped up billions of dollars of debt backed by commercial property and equity offered by real estate investment trusts this year in their search for high yields in a low-interest rate environment. …

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