Wells Fargo-led syndicate of lenders successfully negotiate secured $1.1 billion restructuring credit facility for Pennsylvania Real Estate Investment Trust (PREIT)
Client(s) Wells Fargo Bank, National Association
Jones Day represented Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, in connection with the Chapter 11 financial reorganization plan of Pennsylvania Real Estate Investment Trust (“PREIT”), a publicly traded real estate investment trust that owns and manages a portfolio of shopping malls totaling over 23 million square feet of retail space.
Within 30 days after the commencement of PREIT’s Chapter 11 case, on November 30, 2020, the bankruptcy court confirmed the company’s plan of reorganization (the “Reorganization Plan”) and on December 10, 2020, PREIT emerged from Chapter 11 proceedings. Pursuant to the Reorganization Plan, PREIT’s existing bridge loan agreement was amended and restated to (i) provide revolving loans in an aggregate amount of up to $130 million with a sub-facility for letters of credit in an aggregate amount of up to $10 million, (ii) convert all of the loans existing under the bridge credit agreement into revolving loans under the new facility and (iii) provide for a new tranche of term loans in an aggregate amount of approx. $384 million into which an equivalent amount of existing term loans were exchanged on a pro rata basis under the new facility. A second lien credit agreement, subordinate in lien priority to the amended and restated credit agreement, was entered into in an aggregate amount of approx. $540 million, into which the remaining outstanding principal balance of existing revolving and term loans were exchanged on a pro rata basis under the new second lien facility.
Pursuant to the Reorganization Plan, Jones Day additionally represented Wells Fargo, as administrative agent, in connection with the restructure and resize of a $201 million senior term loan secured by the Fashion District Philadelphia, a multi-parcel mixed use complex containing over 800,000 square feet of leasable retail and office space spanning five blocks of downtown Philadelphia. Jones Day also advised Wells Fargo on the successful restructure and term extension of third-party secured debt encumbering the Woodland Mall in Kentwood, Michigan.