BOSTON--(BUSINESS WIRE)--Dec. 15, 2015--
Boston Properties, Inc. (NYSE:BXP), a real estate investment
trust, announced that on December 15, 2015 it legally defeased the
mortgage loan collateralized by 100 & 200 Clarendon Street (formerly
known as the John Hancock Tower) in Boston, Massachusetts. The mortgage
loan had an outstanding principal balance of $640.5 million, bore
interest at a fixed rate of 5.68% per annum and was scheduled to mature
on January 6, 2017. The cash outlay required for the defeasance in the
amount of approximately $667.4 million was based on the purchase price
of U.S. government securities that will generate sufficient cash flow to
fund continued interest payments on the loan from the effective date of
the defeasance through, and the repayment of the loan on, October 6,
2016, which is the date on which the Company could repay the loan at
par. In connection with the defeasance, the mortgage and other liens on
the property were extinguished and all existing collateral, including
various guarantees, were released.
As a result of the defeasance, the Company expects to recognize a loss
from early extinguishment of debt of approximately $23.5 million, or
($0.14) per common share, in the fourth quarter of 2015. This amount
includes approximately $26.9 million, which is the difference between
the purchase price for the U.S. government securities acquired for the
defeasance and the outstanding principal balance of the mortgage loan,
and approximately $1.4 million of unamortized deferred financing costs,
offset by approximately $4.8 million from the acceleration of the
remaining balance of the historical fair value debt adjustment. The
impact of the defeasance, including the loss from early extinguishment
of debt in the fourth quarter of 2015 and the reduction in interest
expense in 2016, was not reflected in the Company’s earnings guidance
issued on October 29, 2015.
The Company’s Chief Financial Officer, Mike LaBelle, commented, “As we
have discussed in recent earnings conference calls, we are focused on
our 2016 and 2017 debt maturities that carry above-market interest rates
and have been evaluating options for refinancing or repaying these
maturities to capture potential future interest savings. This defeasance
and our ongoing interest rate hedging program are important components
of our strategy. Further, we anticipate additional borrowings in the
near term to replenish our cash balances as a result of the defeasance.”
Boston Properties is a fully integrated, self-administered and
self-managed real estate investment trust that develops, redevelops,
acquires, manages, operates and owns a diverse portfolio of Class A
office space, one hotel, four residential properties and five retail
properties. The Company is one of the largest owners and developers of
Class A office properties in the United States, concentrated in four
markets – Boston, New York, San Francisco and Washington, DC.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151215006764/en/
Source: Boston Properties, Inc.
AT THE COMPANY
Boston
Properties, Inc.
Mike LaBelle, 617-236-3352
Chief Financial
Officer
or
Arista Joyner, 617-236-3343
Investor Relations
Manager