REIT Simon Property Group, which yesterday announced it was raising $500 million in bonds, will price these notes to yield 10.875%. And this is an A3/A- issue!
This is what happens when "high-rated" investment grade companies approach the debt market without access to the TLGP or the discount window. As SPG is the highest rated REIT and has the largest market cap in the space, one can only imagine what kind of interest rates all the other, lesser-rated REITs will need to pony up when they start coming to market to refi all their impending maturities... Ain't gonna be pretty.
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