Filed Pursuant to Rule 424(b)(5)
Registration No. 333-53966
Registration No. 333-58966-01
Prospectus Supplement to Prospectus dated May 9, 2001.
[LOGO OF REGENCY CENTERS] $250,000,000
Regency Centers, L.P.
6.75% Notes due January 15, 2012
Guaranteed as to the Payment of Principal and Interest by
Regency Centers Corporation
----------------
Regency Centers, L.P. will pay interest on the notes on January 15 and
July 15 of each year. The first such payment will be made on July 15, 2002.
The notes will be issued only in denominations of $1,000 and even multiples of
$1,000.
Regency Centers, L.P. has the option to redeem some or all of the notes at
any time at a redemption price equal to the principal amount of the notes to
be redeemed plus a make-whole amount. The make-whole amount will be equal to
the excess of (1) the present value of the notes being redeemed and of the
interest Regency Centers, L.P. would have paid on the notes being redeemed
over (2) the aggregate principal amount of notes being redeemed, determined
using a discount rate of 0.25% plus the average of the most recently published
treasury rates for the maturity comparable to the notes being redeemed.
Regency Centers Corporation guarantees the payment of principal and
interest on the notes.
See "Risk Factors" beginning on page 2 of the accompanying prospectus for
a discussion of material risks that you should consider before buying the
notes.
----------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
----------------
Per Note Total
-------- -----
Initial public offering price............................ 99.850% $249,625,000
Underwriting discount.................................... 0.650% $ 1,625,000
Proceeds, before expenses, to Regency Centers, L.P. ..... 99.200% $248,000,000
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from January 18, 2002 and
must be paid by the purchaser if the notes are delivered after January 18,
2002.
----------------
The underwriter expects to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on January 18, 2002.
Goldman, Sachs & Co. JPMorgan
Wachovia Securities
Commerzbank Securities
PNC Capital Markets, Inc.
Wells Fargo Brokerage Services, LLC
SunTrust Capital Markets, Inc.
U.S. Bancorp Piper Jaffray
----------------
Prospectus Supplement dated January 15, 2002.
REGENCY CENTERS, L.P. AND REGENCY CENTERS CORPORATION
We are a limited partnership which acquires, owns, develops and manages
grocery-anchored shopping centers in targeted markets in the United States. We
are the primary entity through which Regency Centers Corporation, our general
partner and 97% owner, owns and operates its properties. Regency Centers
Corporation will unconditionally guarantee the payment of principal and
interest on the notes. Regency Centers Corporation is a real estate investment
trust whose common stock is traded on the New York Stock Exchange. Regency
Centers' executive offices are located at 121 West Forsyth Street, Suite 200,
Jacksonville, Florida 32202 and our telephone number is (904) 598-7000.
RECENT DEVELOPMENTS
On December 14, 2001, Regency Centers Corporation's controlling
stockholder, Security Capital Group Incorporated, entered into a merger
agreement with General Electric Capital Corporation providing for GE Capital
to acquire all of Security Capital's outstanding stock in a cash merger. As a
result of the merger, GE Capital will become the indirect majority stockholder
of Regency. There can be no assurances that the merger will be completed. As
of December 31, 2001, Security Capital owned approximately 56.5% of Regency's
outstanding common stock on a fully diluted basis. Security Capital, which
will be a wholly-owned subsidiary of GE Capital after the merger, will remain
subject to its stockholders' agreement with Regency following the merger. The
stockholders' agreement contains standstill provisions. The initial term of
the standstill will expire on January 10, 2003 if notice of non-renewal is
given by April 15, 2002.
USE OF PROCEEDS
The net proceeds to Regency Centers, L.P. from the sale of the notes of
approximately $247.9 million will be used to repay outstanding indebtedness
under our line of credit and for general corporate purposes. We plan to
initially apply approximately $145 million of the net proceeds to repay
outstanding indebtedness under our line of credit. The remaining approximately
$103 million will be available for general corporate purposes, but we plan to
apply any amounts not used for general corporate purposes prior to February
11, 2002, when we are permitted to repay certain bid rate loans under our line
of credit, to repay outstanding amounts under our line of credit. Subject to
extension or renewal, our line of credit matures in April 2004 and currently
accrues interest at a rate equal to LIBOR plus .85%.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the nine months ended September
30, 2001 was 1.7.
The ratio of earnings to fixed charges was computed by dividing earnings
by fixed charges. For purposes of computing these ratios, earnings have been
calculated by adding fixed charges (excluding capitalized interest and
preferred distributions) to income before minority interests and gains and
losses from the sale of operating properties and subtracting equity in income
of investments in real estate. Fixed charges consist of interest costs
(whether expensed or capitalized) and amortization of deferred debt costs and
preferred distributions.
S-2
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus supplement and the accompanying
prospectus that are not historical facts are forward-looking statements and,
with respect to Regency Centers Corporation, within Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements are based on current expectations, estimates
and projections about the industry and markets in which Regency Centers
operates, management's beliefs and assumptions made by management. Words such
as "expects," "anticipates," "intends," "plans," "believes," "estimates,"
"should" and similar expressions are intended to identify forward-looking
statements. Such statements involve known and unknown risks, uncertainties and
other factors, including those identified under the caption "Risk Factors" in
the accompanying prospectus, that may cause actual results to be materially
different from any future results expressed or implied by such forward-looking
statements. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus supplement.
CAPITALIZATION
The following table sets forth our capitalization as of September 30, 2001,
as adjusted to give effect to the offering and application of the net proceeds
of the offering to repay outstanding indebtedness under our line of credit. The
capitalization table should be read in conjunction with our consolidated
financial statements and the related notes incorporated by reference in this
prospectus supplement and the accompanying prospectus.
September 30, 2001
----------------------
Offering
Actual As Adjusted
---------- -----------
(in thousands)
Debt:
Notes payable........................................ $1,027,489 $1,027,489
Notes offered hereby................................. -- 250,000
Unsecured line of credit(1).......................... 263,000 15,100
---------- ----------
Total debt......................................... 1,290,489 1,292,589
Limited partners' interest in consolidated
partnerships.......................................... 3,833 3,833
---------- ----------
Partners' capital:
Cumulative redeemable preferred units(2)............. 375,403 375,403
Operating partnership units.......................... 1,251,521 1,251,521
---------- ----------
Total partners' capital............................ 1,626,924 1,626,924
---------- ----------
Total capitalization............................... $2,921,246 $2,923,346
========== ==========
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(1) As of January 15, 2002, the outstanding balance on our line of credit was
about $392 million. We intend to apply the net proceeds of the offering to
repay outstanding balances under our line of credit and, after giving
effect to this repayment, the outstanding balance under our line of credit
is expected to be about $144 million. See "Use of Proceeds".
(2) These units are redeemable at our option after they have been outstanding
for at least five years.
S-3
DESCRIPTION OF THE NOTES
Title: 6.75% Notes due January 15, 2012
Total principal amount being issued: $250,000,000
Due date for principal: January 15, 2012
Interest rate: 6.75% per annum
Date interest starts accruing: January 18, 2002
Interest due dates: Every January 15 and July 15
First interest due date: July 15, 2002
Regular record dates for interest: January 1 for January interest; July 1 for
July interest
Form of Notes: The notes will be issued as one or more global securities, and
may only be withdrawn from the depositary in the limited situations described
under "Description of the Notes--Denomination, Registration, Transfer and Book-
Entry Procedures--Exchanges of Book-Entry Notes for Certificated Notes" in the
accompanying prospectus on page 14.
Name of Depositary: The Depository Trust Company ("DTC"). See the information
under "Description of the Notes--Denomination, Registration, Transfer and Book-
Entry Procedures" in the accompanying prospectus for more information about
DTC's procedures.
Trading in DTC: Indirect holders trading their beneficial interests in the
global securities through DTC must trade in DTC's same-day funds settlement
system and pay in immediately available funds.
Redemption: We may redeem some or all of the notes at any time--that is, we may
repay them early. You have no right to require us to call the notes.
Redemption Price: If we redeem the notes, we must pay you the principal amount
of the notes we are redeeming, plus an amount which is intended to compensate
you for the loss of interest over the term of the notes due to the early
payment. This "Make-Whole Amount" is the excess of (1) the present value of the
notes being redeemed and of the interest you would have received if we did not
redeem the notes (exclusive of interest accrued to the redemption date) over
(2) the aggregate principal amount of notes we are redeeming. The present value
is determined using a discount rate of 0.25% plus the average of the most
recent published treasury rates for the maturity corresponding to the remaining
time to maturity of the notes to be redeemed. In each case, we will also pay
you accrued interest if we have not otherwise paid you interest through the
redemption date. Notes will stop bearing interest on the redemption date, even
if you do not collect your money.
For more detailed information on the determination of the redemption price,
you should read "Description of the Notes--Optional Redemption" on page 15 and
"--Definitions" beginning on page 20, each in the accompanying prospectus.
Redemption Notices: We will give notice to DTC of any redemption we propose to
make at least 30 days, but not more than 60 days, before the redemption date.
If we redeem only some of the notes, DTC's practice is to determine by lot the
amount of notes to be redeemed of each of its participating institutions.
Notice by DTC to these participants and by participants to "street name"
holders of indirect interests in the notes will be made according to
arrangements among them and may be subject to statutory or regulatory
requirements.
Sinking Fund: There is no sinking fund.
S-4
Defeasance: We may defease the notes, or certain covenants of the notes, as
described under "Description of the Notes--Defeasance" beginning on page 24 of
the accompanying prospectus.
Issuances of Additional Notes: We may reopen this series of notes and issue
additional notes of this series in the future.
Certain Covenants: The notes contain various covenants, including the following
limitations on our ability to incur debt. For additional information on these
covenants, including definitions of the capitalized terms in this summary, see
"Description of the Notes--Covenants--Limitation on Indebtedness" beginning on
page 17 and "Definitions" beginning on page 20, each in the accompanying
prospectus.
. Neither Regency Centers, L.P. nor any subsidiary will incur any
Indebtedness if, immediately after giving effect to the incurrence of
the additional Indebtedness and the application of the proceeds of
such Indebtedness, the aggregate principal amount of all outstanding
Indebtedness of Regency Centers, L.P. and its subsidiaries on a
consolidated basis determined in accordance with GAAP is greater than
60% of the sum of, without duplication:
(A) Total Assets as of the end of the most recent calendar quarter
and
(B) The purchase price of any real estate assets or mortgages
receivable acquired and the amount of any securities offering
proceeds received (to the extent that the proceeds were not used
to acquire real estate assets or mortgages receivable or used to
reduce Indebtedness) by Regency Centers, L.P. or any subsidiary
since the end of the most recent calendar quarter, including
proceeds obtained in connection with the incurrence of the
additional Indebtedness.
. Neither Regency Centers, L.P. nor any subsidiary will incur any
Indebtedness secured by any encumbrance on the property of Regency
Centers, L.P. or any subsidiary if, immediately after giving effect to
the incurrence of the additional Indebtedness and the application of
the proceeds from such Indebtedness, the aggregate amount of all
outstanding Indebtedness of Regency Centers, L.P. and its subsidiaries
on a consolidated basis which is secured by an encumbrance on property
of Regency Centers, L.P. or any subsidiary is greater than 40% of the
sum of:
(A) Total Assets as of the end of the most recent calendar quarter and
(B) The purchase price of any real estate assets or mortgages
receivable acquired and the amount of any securities offering
proceeds received (to the extent that the proceeds were not used
to acquire real estate assets or mortgages receivable or used to
reduce Indebtedness) by Regency Centers, L.P. or any subsidiary
since the end of the most recent calendar quarter, including
proceeds obtained in connection with the incurrence of the
additional Indebtedness.
. Neither Regency Centers, L.P. nor any subsidiary will incur any
Indebtedness if Consolidated Income Available for Debt Service for the
four consecutive fiscal quarters most recently ended prior to the date
of the incurrence of the additional Indebtedness, on a pro forma
basis, would be less than 1.5 times the Annual Service Charge on all
Indebtedness outstanding after giving effect to the incurrence of such
Indebtedness and to the application of the proceeds from such
Indebtedness, calculated on the assumptions described under
"Description of the Notes--Covenants--Limitation on Indebtedness"
beginning on page 17 of the accompanying prospectus.
S-5
. Regency Centers, L.P. and its subsidiaries must at all times own Total
Unencumbered Assets equal to at least 150% of the aggregate
outstanding principal amount of the Unsecured Indebtedness of Regency
Centers, L.P. and its subsidiaries on a consolidated basis.
The notes will also contain the other covenants described under "Description
of the Notes--Covenants" beginning on page 16 and will be subject to the events
of default described under "Description of the Notes--Events of Default"
beginning on page 23, each in the accompanying prospectus.
This section summarizes the specific financial and legal terms of the notes
that are more generally described under "Description of the Notes" beginning on
page 12 of the accompanying prospectus. If anything described in this section
is inconsistent with the terms described under "Description of the Notes" in
the accompanying prospectus, you should consider the terms here to be the ones
that prevail.
S-6
UNDERWRITING
Regency Centers, L.P., Regency Centers Corporation and the underwriters have
entered into an underwriting agreement and a pricing agreement with respect to
the notes. Subject to certain conditions, each underwriter has severally agreed
to purchase the principal amount of notes indicated in the following table.
Principal Amount
Underwriters of Notes
------------ ----------------
Goldman, Sachs & Co. .......................................... $100,000,000
J.P. Morgan Securities Inc. ................................... 100,000,000
First Union Securities, Inc.................................... 23,750,000
Commerzbank Capital Markets Corp............................... 6,250,000
PNC Capital Markets, Inc....................................... 6,250,000
Wells Fargo Brokerage Services, LLC............................ 6,250,000
SunTrust Capital Markets, Inc.................................. 3,750,000
U.S. Bancorp Piper Jaffray Inc................................. 3,750,000
------------
Total.......................................................... $250,000,000
============
Notes sold by the underwriters to the public will initially be offered at the
initial public offering price set forth on the cover page of this prospectus
supplement. Any notes sold by the underwriters to securities dealers may be
sold at a discount from the initial public offering price of up to 0.400% of
the principal amount of the notes. Any such securities dealers may resell any
notes purchased from the underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to 0.250% of the
principal amount of the notes. If all the notes are not sold at the initial
public offering price, the underwriters may change the offering price and the
other selling terms.
The notes are a new issue of securities with no established trading market.
Regency Centers, L.P. has been advised by the underwriters that the
underwriters intend to make a market in the notes but are not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the notes.
In connection with the offering, the underwriters may purchase and sell the
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater aggregate
principal amount of notes than it is required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the notes
while the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the representatives have repurchased notes sold by or
for the account of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the underwriters at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
Regency Centers, L.P. estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $100,000.
S-7
Regency Centers, L.P. and Regency Centers Corporation have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act of 1933.
In the ordinary course of business, certain of the underwriters and their
affiliates have provided, and may in the future provide, investment banking
and/or commercial banking services to Regency Centers, L.P. and its affiliates
for which they have received, and may in the future receive, customary fees.
VALIDITY OF NOTES
The validity of the notes offered hereby and the guarantee will be passed
upon for Regency Centers, L.P. and Regency Centers Corporation by Foley &
Lardner, Jacksonville, Florida. The validity of the notes offered hereby and
the guarantee will be passed upon for the underwriters by Sullivan & Cromwell,
New York, New York.
S-8
PROSPECTUS
$600,000,000
Notes
[LOGO OF REGENCY CENTERS]
Regency Centers, L.P.
121 W. Forsyth Street
Suite 200
Jacksonville, Florida 32202
(904) 356-7000
- -------------------------------------------------------------------------------
Regency Centers, L.P. may offer from time to time up to $600,000,000 of
unsecured notes. We will provide the amount, price and terms of the notes in a
prospectus supplement.
The notes will be guaranteed by our general partner, Regency Centers
Corporation.
If any agents, underwriters or dealers are involved in the sale of the notes,
we will include the names of the agents, underwriters or dealers and their
commissions or discounts and the net proceeds we will receive from the sale in
a prospectus supplement.
This prospectus may not be used for the sale of notes unless accompanied by a
prospectus supplement.
See "Risk Factors" beginning on page 2 for a discussion of material risks
which you should consider before buying notes.
- -------------------------------------------------------------------------------
These notes have not been approved by the Securities and Exchange Commission
or any state securities commission nor has the Securities and Exchange
Commission or any state securities commission passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
May 9, 2001
PROSPECTUS SUMMARY
The Issuer and the Guarantor
Regency Centers, L.P. is a limited partnership which owns, operates and
develops grocer-anchored neighborhood shopping centers throughout the United
States. We are the entity through which Regency Centers Corporation, our
general partner, owns and operates its properties. Regency Centers Corporation
will unconditionally guarantee the payment of the notes. Regency Centers
Corporation is a real estate investment trust whose common stock is traded on
the New York Stock Exchange. It changed its name from Regency Centers
Corporation on February 12, 2001.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public from the SEC's web site
at www.sec.gov and our web site at www.regencycenters.com.
This prospectus is part of a registration statement we filed with the SEC. The
SEC allows us to "incorporate by reference" the information we file with them,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all of the notes:
. Our annual report on Form 10-K for the year ended December 31, 2000
(Commission File No. 0-24763); and
. Our general partner's annual report on Form 10-K for the year ended December
31, 2000 (Commission File No. 1-12298).
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Ms. Miriam Giles
Shareholder Communications
Regency Centers Corporation
121 W. Forsyth Street
Suite 200
Jacksonville, FL 32202
(904) 356-7000
You should rely only on the information incorporated by reference or provided
in this prospectus or any supplement. We have not authorized anyone else to
provide you with different information. We are not making an offer of these
notes in any state where the offer is not permitted. You should not assume that
the information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
1
RISK FACTORS
The following contains a description of the material risks involved in owning
notes.
Our Debt Financing May Adversely
Affect Payment of Notes
We do not expect to generate sufficient funds from operations to make balloon
principal payments when due on our debt, including the notes. If we are unable
to refinance our debt on acceptable terms, we might be forced to dispose of
properties, which might result in losses, or to obtain financing at unfavorable
terms. Either could reduce the cash flow available to pay our debt. In
addition, if we cannot make required mortgage payments, the property securing
the mortgage could be foreclosed upon by the mortgagee, causing the loss of
cash flow from that property to pay our debt.
Neither our general partner's nor our organizational documents limit the amount
of debt that may be incurred. Our general partner has established a policy (1)
limiting total debt to 50% of total assets at cost and (2) maintaining a
minimum debt service coverage ratio of 2:1. The board of directors of our
general partner may amend this policy at any time without the approval of its
shareholders or our limited partners.
Unless otherwise indicated in the prospectus supplement, the indenture for the
notes will permit us to incur additional debt, subject to limitations. The
degree to which we are leveraged could have important consequences to you,
including the following:
. Leverage could affect our ability to obtain additional financing in the
future to repay the notes or for working capital, capital expenditures,
acquisitions, development or other general corporate purposes, and
. Leverage could make us more vulnerable to a downturn in our business or the
economy generally.
Substantially all of our debt is cross-defaulted, but not cross-collateralized.
Our line of credit also imposes covenants which limit our flexibility in
obtaining other financing, such as limitations on floating rate debt and a
prohibition on negative pledge agreements.
Increased Interest Rates May
Reduce Our Cash Flow
We are obligated on floating rate debt. If we do not eliminate our exposure to
increases in interest rates through interest rate protection or cap agreements,
such increases may reduce cash flow and our ability to service our debt. If
interest rates increase significantly, we would consider entering into interest
rate swap or cap agreements for all or a portion of our floating rate debt.
We are also prohibited by the terms of our unsecured line of credit from
incurring other floating rate debt in excess of 25% of the gross asset value of
our assets unless we obtain interest rate swaps, caps or collars which prevent
the effective interest rate on the portion of such other debt in excess of 25%
from increasing above 9% per year.
Although swap agreements would enable us to convert floating rate debt to fixed
rate debt and cap agreements would enable us to cap our maximum interest rate,
they would expose us to the risk that the counterparties to these hedge
agreements may not perform, which could increase our exposure to rising
interest rates. Generally, however, the counterparties to our hedge agreements
would be major financial institutions. If we enter into any swap agreements in
the future, decreases in interest rates would increase our interest expense as
compared to the underlying floating rate debt. This could result in our making
payments to unwind these agreements, such as in connection with a prepayment of
the floating rate debt. Cap agreements would not protect us from increases up
to the capped rate.
Effective Subordination of Notes
May Reduce Amounts Available for
Payment of Notes
The notes will be unsecured. The holders of secured debt may foreclose on our
assets securing such debt, reducing the cash flow from the foreclosed property
available for payment of unsecured debt. The holders of secured debt also would
have priority
2
over unsecured creditors in the event of our liquidation. The indenture for the
notes permits us to enter into additional mortgages and incur secured debt if
the conditions specified in the indenture are met. See "Description of the
Notes--Covenants". In the event of our bankruptcy, liquidation or similar
proceeding, the holders of secured debt will be entitled to proceed against
their collateral, and such collateral will not be available for payment of
unsecured debt, including the notes. As a result, the notes will be effectively
subordinated to our secured debt.
The guarantee of the notes by the guarantor is an unsecured obligation of the
guarantor, which
(1) ranks equally with the guarantor's other unsecured and unsubordinated debt;
and
(2) would be effectively subordinated to any mortgage or other secured debt of
the guarantor.
Unsuccessful Development
Activities Could Reduce Cash Flow
We intend to actively pursue development activities as opportunities arise.
Development activities require various government and other approvals. We may
not recover our investment in development projects for which approvals are not
received. We will incur risks associated with development activities,
including:
. the risk that we may abandon development opportunities and lose our
investment in these developments;
. the risk that construction costs of a project may exceed original estimates,
possibly making the project unprofitable;
. a lack of cash flow during the construction period; and
. the risk that occupancy rates and rents at a completed project will not be
sufficient to make the project profitable.
Also, we have competitors seeking properties for development, some of which may
have greater resources than we have.
If we sustain material losses due to an unsuccessful development project, our
cash flow available to pay the notes may be reduced.
Loss of Revenues from Major Tenant
Could Reduce Our Future Cash Flow
We derive significant revenues from anchor tenants such as Kroger or Publix
that occupy more than one center. We could be adversely affected by the loss of
revenues if a major tenant:
. files for bankruptcy or insolvency;
. experiences a downturn in its business;
. does not renew its leases as they expire; or
. renews at lower rental rates.
Vacated anchor space, including space owned by the anchor, can reduce rental
revenues generated by the shopping center because of the loss of the departed
anchor tenant's customer drawing power. Most anchors have the right to vacate
and prevent retenanting by paying rent for the balance of the lease term. If
major tenants vacate a property, then other tenants may be entitled to
terminate their leases at the property.
We Could Be Adversely Affected by
Poor Market Conditions Where
Properties Are Geographically
Concentrated
Our performance depends on the economic conditions in markets in which our
properties are concentrated, including Florida, California, Texas and Georgia.
Our operating results could be adversely affected if market conditions, such as
an oversupply of space or a reduction in demand for real estate, in these areas
become more competitive relative to other geographic areas.
Partnership Structure May Limit
Flexibility to Manage Assets
We are our general partner's property-owning vehicle. From time to time, we
acquire properties in exchange for limited partnership interests. This
acquisition structure may permit limited partners who contribute properties to
us to defer some, if not all, of the income tax that they would incur if they
sold the property.
Properties contributed to us may have unrealized gain attributable to the
difference between the fair market value and adjusted tax basis in the
properties prior to contribution. As a result, the sale of these properties
could cause adverse tax consequences to the limited partners who contributed
them.
3
Generally, we have no obligation to consider the tax consequences of our
actions to any limited partner. However, we may acquire properties in the
future subject to material restrictions on refinancing or resale designed to
minimize the adverse tax consequences to the limited partners who contribute
such properties. These restrictions could significantly reduce our flexibility
to manage our assets by preventing us from reducing mortgage debt or selling a
property when such a transaction might be in our best interest in order to
reduce interest costs or dispose of an under-performing property.
Uninsured Loss May Adversely
Affect Our Ability to Pay Notes
We carry comprehensive liability, fire, flood, extended coverage and rental
loss insurance with respect to our properties with policy specifications and
insured limits customarily carried for similar properties. We believe that the
insurance carried on our properties is adequate in accordance with industry
standards. There are, however, types of losses (such as from hurricanes, wars
or earthquakes) which may be uninsurable, or the cost of insuring against such
losses may not be economically justifiable. If an uninsured loss occurs, we
could lose both the invested capital in and anticipated revenues from the
property, and we would still be obligated to repay any recourse mortgage debt
on the property. In that event, our cash flow available to pay the notes could
be reduced.
Highly Leveraged Transaction or
Change In Control May Adversely
Affect Credit-worthiness of Notes
The indenture for the notes contains provisions that are intended to protect
holders of the notes against adverse effects on the creditworthiness of the
notes in the event of a highly leveraged transaction or a significant corporate
transaction (such as the acquisition of securities, merger, the sale of assets
or otherwise) involving us or our general partner. However, the indenture does
not contain provisions which protect holders of notes against adverse effects
of a change in control per se, such as the sale of the stock of our general
partner or the election of its directors. There can be no assurance that we or
our general partner will not enter into such a transaction and adversely affect
our ability to meet our obligations under the notes or our general partner's
obligation under its guarantee. Moreover, there can be no assurance that a
significant corporate transaction such as an acquisition which complies with
the indenture provisions will not adversely affect the creditworthiness of the
notes.
Tax-Driven Actions by Regency
Centers May Reduce
Creditworthiness of Notes
We must rely on our general partner to manage our affairs and business. In
addition to the risks described above that relate to us, our general partner is
subject to other risks that may affect its financial condition. These risks
include adverse consequences if our general partner fails to qualify as a real
estate investment trust for federal income tax purposes. Our general partner
could cause us to take actions which help maintain its qualification as a real
estate investment trust even though such actions may adversely affect the
creditworthiness of the notes. For example, our general partner could cause us
to incur debt to enable it to fulfill the shareholder distribution requirements
necessary to maintain its real estate investment trust qualification. If our
general partner fails to qualify as a real estate investment trust, the adverse
tax consequences could also reduce its ability to satisfy its obligations under
its guarantee.
Security Capital Contractual
Limitations May Adversely Impact
Our Operations and Cash Flow
Affiliates of Security Capital Group Incorporated owned 34,273,236 shares of
common stock of our general partner as of March 13, 2001, constituting 56.6% of
our general partner's common stock outstanding on that date (including options
and convertible securities on a fully diluted basis).
Security Capital is our general partner's single largest shareholder and has
participation rights entitling it to maintain its percentage ownership of the
common stock. Security Capital has the right to nominate the number of the
directors of our general partner's board of directors proportionate to its
stock ownership, rounded down to the nearest whole number, but not more than
49% of the board. Although "standstill" provisions preclude Security Capital
from owning more than 60% of our general partner's common stock on a fully
diluted basis and
4
limit Security Capital's ability to vote its shares, Security Capital has
substantial influence over our general partner's affairs. If the standstill
period or any standstill extension term ends, Security Capital could be in a
position to control the election of the board or the outcome of any corporate
transaction or other matter submitted to the shareholders for approval.
Our general partner has agreed with Security Capital to limitations on our
general partner's operations, including restrictions relating to:
. incurrence of total debt exceeding 60% of the gross book value of its
consolidated assets,
. investments in properties other than shopping centers, and
. entering into joint ventures or similar arrangements.
These restrictions limit our general partner's flexibility to structure
transactions that might otherwise be advantageous to us. Although we do not
believe that these limitations will materially impair our ability to conduct
our business, there can be no assurance that these limitations will not
adversely affect our operations in the future, including reducing the cash flow
available for payment of the notes.
We Face Competition from Numerous
Sources
The ownership of shopping centers is highly fragmented, with less than 10%
owned by real estate investment trusts. We face competition from other real
estate investment trusts in the acquisition, ownership and leasing of shopping
centers as well as from numerous small owners. We compete to develop shopping
centers with other real estate investment trusts engaged in development
activities as well as with local, regional and national real estate developers.
We seek to maximize rents per square foot by establishing relationships with
supermarket chains that are first or second in their markets and leasing non-
anchor space in multiple centers to national or regional tenants. We compete to
develop properties by applying our proprietary research methods to identify
development and leasing opportunities and by pre-leasing a significant portion
of a center before beginning construction. We compete in the acquisition of
properties through proprietary research that identifies opportunities in
markets with high barriers to entry and higher-than-average population growth
and household income.
There can be no assurance, however, that other real estate owners or developers
will not utilize similar research methods and target the same markets and
anchor tenants that we target. These entities may successfully control these
markets and tenants to our exclusion. If we cannot successfully compete in our
targeted markets, our cash flow, and therefore our ability to pay the notes,
may be adversely affected.
Costs of Environmental Remediation
Could Reduce Our Cash Flow
Under various federal, state and local laws, an owner or manager of real
property may be liable for the costs of removal or remediation of hazardous or
toxic substances on the property. These laws often impose liability without
regard to whether the owner knew of, or was responsible for, the presence of
hazardous or toxic substances. The cost of any required remediation could
exceed the value of the property and/or the aggregate assets of the owner.
We have properties that will require or are currently undergoing varying levels
of environmental remediation. These remediations are not expected to have a
material financial effect on us or our guarantor due to financial statement
reserves and various state-regulated programs that shift the responsibility and
cost for remediation to the state.
The presence of such substances, or the failure to properly remediate such
substances, may adversely affect our ability to sell or rent a contaminated
property or to borrow using the property as collateral. Any of these
developments could reduce the cash flow available for payment of the notes.
5
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general corporate
purposes, which may include the repayment of outstanding indebtedness, the
expansion and improvement of properties in our portfolio, development costs for
new centers and the acquisition of shopping centers as suitable opportunities
arise. If we use the net proceeds for another purpose, we will include that
information in a prospectus supplement.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that are not historical facts are
forward-looking statements and, with respect to Regency Centers Corporation,
within Section 27A of the Securities Act and Section 21E of the Exchange Act.
These forward-looking statements are based on current expectations, estimates
and projections about the industry and markets in which Regency Centers
Corporation operates, management's beliefs and assumptions made by management.
Words such as "expects," "anticipates," "intends," "plans," "believes,"
"estimates," "should" and similar expressions are intended to identify forward-
looking statements. Such statements involve known and unknown risks,
uncertainties and other factors, including those identified under the caption
"Risk Factors" in this prospectus, that may cause actual results to be
materially different from any future results expressed or implied by such
forward-looking statements. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for the years ended December 31, 2000,
1999, 1998, 1997 and 1996 were 1.7, 1.9, 2.1, 2.3 and 1.8, respectively.
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For purposes of computing these ratios, earnings have been
calculated by adding fixed charges (excluding capitalized interest and
preferred distributions) to income before minority interests and gains and
losses from the sale of operating properties and subtracting equity in income
of investments in real estate. Fixed charges consist of interest costs (whether
expensed or capitalized) and amortization of deferred debt costs and preferred
distributions.
6
REGENCY CENTERS, L.P. AND ITS GENERAL PARTNER
We own, operate and develop grocer-anchored, neighborhood shopping centers with
high quality specialty retailers in prosperous trade areas throughout the
United States. We are the entity through which Regency Centers Corporation, our
general partner, owns and operates its properties and intends to expand its
ownership and operations of properties. Our general partner owns 98% of our
common partnership units.
As of December 31, 2000, our general partner owned, directly or indirectly, 242
properties in 22 states containing approximately 27.8 million square feet of
gross leasable area ("GLA"), representing an investment in real estate of
approximately $2.8 billion.
As of December 31, 2000, approximately 23.5% of our general partner's GLA was
located in Florida, 17.7% was located in California, 15% was located in Texas,
9.2% was located in Georgia and 6.3% in Ohio. Our shopping centers, excluding
those under development or redevelopment, were approximately 95.3% leased as of
December 31, 2000.
Our general partner previously operated under the name Regency Realty
Corporation, but changed its name to Regency Centers Corporation in February
2001 to acknowledge its brand and position in the shopping center industry. The
real estate business of our general partner was established in 1963 as a
Jacksonville, Florida-based operator and developer of shopping centers. By the
early 1990s, Regency Centers Corporation had developed a successful track
record of developing, owning and operating neighborhood and community shopping
centers, which offered substantial cycle-resistant opportunities for growth. In
1993, Regency Centers Corporation was formed as a Florida corporation,
completed its initial public offering (NYSE: REG) and became a qualified, self-
administered, self-managed real estate investment trust.
Operating and Investment Philosophy
Our key operating and investment objective is to create long-term shareholder
value by:
. focusing on high quality grocer-anchored neighborhood shopping centers in
attractive markets;
. maximizing the value of the portfolio through our research-based investment
strategies, our Premier Customer Initiative program and our customer-driven
development programs; and
. using conservative financial management and our substantial capital base to
cost effectively access capital to fund our growth.
Grocer-Anchored Strategy
We focus our investment strategy on grocer-anchored neighborhood shopping
centers that are located in infill locations or high growth corridors and are
anchored by a dominant grocer in the local market. Infill locations are
situated in densely populated residential communities where there are
significant barriers to entry, such as zoning restrictions, growth management
laws or limited availability of sites for development or expansions. Regardless
of the economic cycle, grocer sales have outpaced inflation in 10 of the last
15 years. More resistant to down cycles by the nature of their business,
market-leading grocers generate continuous consumer traffic to our centers.
This significant consumer traffic, driven by necessity and convenience attracts
and benefits our centers and side-shop tenants.
The average remaining lease term for our grocer-anchored tenants is 14.5 years.
Since these grocers draw steady consumer traffic, their commitment to signing
long-term leases provides us with stability and sustainable cash flow.
Our grocer-anchored centers serve neighborhoods and communities. Their
carefully selected locations enable local shoppers to visit weekly or even
several times a week. A neighborhood center is a convenient, cost-effective
distribution platform for food retailers. A neighborhood center that is
anchored by a leading grocer is highly resistant to competition from Internet
e-tailers and mass merchandise stores, benefiting all of our tenants.
7
Grocer-anchored centers generate substantial daily traffic and offer
sustainable competitive advantages to their tenants. This high traffic
increases tenant sales, resulting in higher occupancy, rents and rental rate
growth, which in turn helps to maintain our cash flow growth and increase the
value of our portfolio over the long term.
Ninety percent of our centers are anchored by one of the top three grocers in
their local markets. Our anchor tenants include leading supermarket chains like
Kroger, Publix, Safeway and Albertson's. With average annual sales for a
Regency grocer of $22.4 million, our grocers outpace their respective chain
averages by more than 20 percent and generate an average of more than 14,000
shopper visits each week, or more than 725,000 shopper visits annually.
Research Driven Market Selection
Grocer-anchored centers are best located in neighborhood trade areas with
attractive demographics. Our typical center has a 3-mile population:
. of approximately 75,000,
. with an average household income in excess of $71,000, and
. projected 5-year population growth of more than 8%.
The trade areas of our centers are growing nearly twice as fast and household
incomes are more than 30% greater than the national averages, translating into
more retail buying power. Once specific markets are selected, we seek the best
location within the best neighborhoods, preferably occupying a dominant corner
close to residential communities, with excellent visibility for our tenants and
easy access for neighborhood shoppers.
Premier Customer Initiative
For the same reason we choose to anchor our centers with leading grocers, we
also seek a range of strong national, regional and local specialty tenants. We
have created a formal partnering process--the Premier Customer Initiative--to
promote mutually beneficial relationships with our non-grocer specialty
retailers. We strive to build a base of specialty tenants who represent the
"best-in-class" operators in their merchandising categories. These tenants:
. strengthen the consumer appeal of a center's grocer-anchor,
. help to stabilize a center's occupancy,
. reduce re-leasing downtime,
. lower tenant turnover, and
. yield higher sustainable rents.
For these reasons, we are committed to giving these premier tenants support to
realize their expansion and profit objectives. We provide this support by
partnering with top neighborhood operators while they are in the strategic
stage of store-location planning. Our industry expertise enables us to offer
prospective tenants current, in-depth data on key markets nationwide, as well
as access to multiple prime locations in the best shopping centers and top
markets with the leading grocer-anchors. Our premier tenants also benefit from
employing standardized leases as they contract for space in multiple locations.
Customer-driven Development
Our development program is customer-driven, meaning that we have an executed
lease from the anchor before we purchase the land for development. As a result
of commitments from our anchor tenants and our well-established relationships
with key specialty retailers, a significant percentage of the retail space is
dedicated before construction begins. Developments serve the growth needs of
our grocery and specialty retail customers, result in modern shopping centers
with 20-year leases from the grocer-anchors and produce either attractive
returns on invested capital or profits from sale.
8
Our development program significantly contributed to our overall growth during
2000. In 2000, we completed 34 shopping center and build-to-suit developments
that represented an investment of $236 million. On average, as of December 31,
2000, these newly completed developments are 96% leased. At December 31, 2000,
we had 56 shopping center developments, re-developments, renovations and
single-tenant projects still in progress. When complete, these projects will
represent a total investment of $730 million, $418 million of which has already
been funded.
Capital Strategy
We intend to maintain a conservative capital structure designed to fund our
growth programs without returning to the equity markets or compromising our
investment-grade ratings. This approach is founded on our self-funding business
model, which relies on capital sourced from cash flow, developments for sale,
joint ventures and dispositions of limited-growth non-strategic assets. We have
the financial flexibility to follow this approach, with, at year-end 2000:
. a debt-to-total asset ratio of approximately 41%,
. an interest coverage ratio of 3.0,
. coverage ratio for debt service and preferred unit distributions of 2.1, and
. nearly 80% of our real estate assets unencumbered by mortgages.
During 2000, we sold 22 development properties that generated total proceeds in
excess of $140 million. In addition, in December 2000, we sold two core
development properties to our joint venture with the Oregon Public Employees
Retirement Fund (OPERF). These transactions collectively generated more than
$180 million in total proceeds and $20 million in profits.
The OPERF joint venture represents a major co-investment partnership that is
expected to produce substantial benefits for us, including a commitment by
OPERF to invest in a $300 million portfolio of neighborhood and community
shopping centers. When the third and final phase of the joint venture is
completed in the second quarter of 2001, the joint venture will hold a total of
five stabilized developments acquired from Regency and three centers acquired
from OPERF located in attractive infill markets. The joint venture also plans
to acquire $150 million of grocer-anchored shopping centers throughout the
United States during 2001 and 2002. We will own 20% of the joint venture and
will be paid asset management fees, property management fees and incentive
fees.
Security Capital Group Alliance
In June 1996, our general partner entered into a strategic alliance with
Security Capital Holdings, S.A. (together with its parent company, Security
Capital U.S. Realty, "SC-USRealty"). As a result of this alliance, SC-USRealty
became our general partner's principal stockholder. In addition to SC-
USRealty's initial investment in 1996, SC-USRealty participated in subsequent
equity issuances of our general partner pursuant to participation rights.
On January 16, 2001, in connection with the acquisition of the assets of SC-
USRealty by its U.S. affiliate, Security Capital Group Incorporated ("Security
Capital"), a Security Capital subsidiary succeeded to SC-USRealty's interest in
our general partner and its rights under this strategic alliance.
Security Capital beneficially owned approximately 57% of our general partner's
common stock as of March 13, 2001, including options and convertible securities
on a fully diluted basis. Security Capital's stockholders agreement with our
general partner, which includes provisions limiting Security Capital's stock
ownership during a standstill period, gives Security Capital the right to own
up to 60% of our general partner's common stock on a fully diluted basis. In
connection with its investment, Security Capital has the right during the
standstill period to nominate up to 49% of our general partner's board of
directors. Historically Security Capital has nominated two directors.
9
In connection with Security Capital's acquisition of SC-USRealty, our general
partner obtained an 18-month extension to its original five-year standstill
agreement with SC-USRealty. The expiration of the standstill agreement has been
extended from July 2001 to January 2003. The standstill agreement includes a
key provision that any reduction in Security Capital's position in the company
requires notice to our general partner to give it an opportunity to buy the
shares Security Capital proposes to sell.
PROPERTIES
Our properties as of December 31, 2000 are summarized below by state:
Location # Properties GLA % Leased(1)
- -------- ------------ ---------- -----------
Florida................................. 53 6,535,088 92.8%
California.............................. 39 4,922,329 98.3
Texas................................... 34 4,165,857 94.2
Georgia................................. 26 2,553,041 95.4
Ohio.................................... 13 1,760,955 97.0
North Carolina.......................... 13 1,302,751 97.4
Washington.............................. 10 1,180,020 95.5
Colorado................................ 10 897,788 97.9
Oregon.................................. 9 776,853 91.7
Alabama................................. 5 516,062 97.9
Arizona................................. 7 481,215 97.9
Tennessee............................... 4 423,326 99.6
Virginia................................ 4 397,624 95.1
Missouri................................ 2 369,045 95.8
Kentucky................................ 2 304,347 91.1
Michigan................................ 3 274,987 94.1
Delaware................................ 1 228,169 98.6
Mississippi............................. 2 185,061 97.7
Illinois................................ 1 178,601 86.4
South Carolina.......................... 2 162,056 97.0
New Jersey.............................. 1 88,867 --
Wyoming................................. 1 87,777 --
--- ---------- -----
Total................................. 242 27,791,819 95.3%
=== ========== =====
- --------
(1) Excludes properties under development or redevelopment. If these centers
were included, the shopping centers would be 88.8% leased as of December
31, 2000.
10
The following table summarizes the largest tenant leases of our shopping
centers as of December 31, 2000, based upon percentage of annual base rent
exceeding 1% of total base rent. The table includes 100% of the base rent from
leases of properties owned by joint ventures.
% of % of
Regency Centers Total Base Regency Centers
Tenant GLA Owned GLA Rent Base Rent
- ------ --------- --------------- ----------- ---------------
Kroger.................... 3,271,507 11.8% $29,603,109 10.4%
Publix.................... 1,956,594 7.0 14,455,804 5.1
Safeway................... 1,481,454 5.3 13,357,008 4.7
Blockbuster............... 374,421 1.3 6,638,982 2.3
Albertsons................ 702,097 2.5 6,301,880 2.2
Winn Dixie................ 760,329 2.7 5,286,371 1.9
Hallmark.................. 244,621 0.9 3,571,965 1.3
Harris Teeter............. 276,475 1.0 2,984,436 1.1
Our leases have lease terms generally ranging from three to five years for
tenant space under 5,000 square feet. Leases greater than 10,000 square feet
generally have lease terms in excess of five years, mostly comprised of anchor
tenants with leases ranging from five to 40 years. Many of the anchor leases
contain provisions allowing the tenant the option of extending the term of the
lease at expiration. Our leases typically provide for the monthly payment in
advance of fixed minimum rentals (in some cases), additional rents calculated
as a percentage of the tenant's sales, the tenant's pro rata share of real
estate taxes, insurance and common area maintenance expenses and reimbursement
for utility costs if not directly metered.
THE GUARANTOR
The following provides material information with respect to Regency Centers
Corporation, our sole general partner and the guarantor of the notes.
Our general partner is a Florida corporation which began operations as a real
estate investment trust in 1993 with the completion of its initial public
offering. It was the successor to the real estate business of The Regency
Group, Inc. which had operated since 1963. Our general partner owned
approximately 98% of our common partnership interests as of December 31, 2000.
Our general partner is also a guarantor of our:
. $625 million unsecured line of credit,
. $100 million 7 1/8% notes due 2005,
. $200 million 7.40% notes due 2004,
. $50 million 7.75% notes due 2009,
. $150 million 8.45% notes due September 1, 2010,
. $10 million 8.00% notes due December 15, 2010, and
. $220 million 7.95% notes due January 15, 2011.
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DESCRIPTION OF THE NOTES
This prospectus describes general terms of our notes. When we offer to sell a
particular series of notes, we will describe the specific terms of those notes
in a supplement to this prospectus. We will also indicate in the supplement
whether the general terms described in this prospectus apply to a particular
series of notes. Accordingly, for a description of the terms of a particular
issue of notes, you should read both the applicable prospectus supplement and
the following description.
The notes will be issued under an indenture, dated as of December 5, 2001, as
amended or supplemented from time to time, among ourselves, our general partner
and First Union National Bank, as trustee. We have summarized select portions
of the indenture below. The summary is not complete. The form of the indenture
has been incorporated by reference as an exhibit to the registration statement.
You should read the indenture for provisions that may be important to you. In
the summary below, we have included references to the section numbers of the
indenture so that you can easily locate these provisions. Capitalized terms
used in the summary have the meanings specified in the indenture. The indenture
is governed by the Trust Indenture Act of 1939, as amended.
General
The notes will be our direct unsecured obligations. We can issue an unlimited
amount of notes under the indenture in one or more series. The terms of each
series of notes will be established by or pursuant to a resolution of the board
of directors of our general partner or as established in the indenture. We may
issue notes of one series at different times and we may issue additional notes
of a series without the consent of the holders of such series.
The prospectus supplement relating to any series of notes being offered will
contain the specific terms of the notes, including, without limitation:
(1) the title of the notes;
(2) any limit on the aggregate principal amount of the notes;
(3) the person to whom interest is payable, if other than the person in
whose name the note is registered on the regular record date for
interest;
(4) the date or dates on which the principal of the notes will be payable;
(5) the rate or rates at which the notes will bear interest, if any, the
date or dates from which interest will accrue, the dates on which
interest will be payable, the regular record dates for such interest
payment dates, and the basis upon which interest will be calculated if
other than a 360 day year of twelve 30-day months;
(6) the place or places where the principal of, premium or interest on such
notes will be payable, if other than our office maintained for that
purpose in Jacksonville, Florida or the borough of Manhattan in New
York;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which we may redeem the notes;
(8) any obligation we have to redeem or purchase the notes under any
sinking fund or analogous provision or at the option of a holder of
notes, and the dates on which and the price or prices at which we will
repurchase notes at the option of holders and other terms and
conditions of these repurchase obligations;
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(9) whether the amount of payments of principal of, premium or interest on
the notes will be determined by reference to an index, formula or other
method and the manner in which these amounts will be determined;
(10) if other than U.S. dollars, the currency, currencies or currency units
in which principal of, premium and interest on the notes will be paid;
(11) if payments of principal of, premium or interest on the notes will be
made in a currency or currency unit other than that in which the notes
are stated to be payable, at our election or at the election of
holders of notes, the currency or currency units which may be elected,
the terms of the election and the manner for determining the amount
payable upon an election;
(12) if other than the principal amount of the notes, the portion of the
principal amount of the notes payable upon acceleration of the
maturity date;
(13) if the principal amount payable at the maturity of the notes cannot be
determined before maturity, the amount which will be deemed to be the
principal amount of such notes before maturity;
(14) whether the notes will be issued in certificated and/or book-entry
form;
(15) any additions to or changes from the terms of the notes with respect
to the events of default, covenants or other terms of the indenture;
and
(16) any other terms of the notes not inconsistent with the provisions of
the indenture.
The notes may provide for less than their entire principal amount to be payable
upon declaration of acceleration of the maturity thereof. Special federal
income tax, accounting and other considerations applicable to these notes will
be described in the applicable prospectus supplement.
Denomination, Registration, Transfer and Book-Entry Procedures
Denomination
The notes of any series will be issued in denominations of $1,000 and even
multiples of $1,000, unless we describe other denominations in the applicable
prospectus supplement. We will only issue the notes in fully registered form,
without interest coupons. We will not issue notes in bearer form.
Registration and Transfer
You may transfer or exchange the notes of any series at the office of the
trustee. You will not pay service charge for any transfer or exchange of notes,
but we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or exchange. If we
designate any transfer agent (in addition to the trustee) in the applicable
prospectus supplement, we may at any time change such designation or change the
location through which the transfer agent acts, except that we must maintain a
transfer agent in each place of payment for the notes. We may at any time
designate additional transfer agents for any series of notes.
Book-Entry Procedures
Global Notes. Notes may be represented by one or more notes in global form (a
"global note"). Global notes will be deposited upon issuance with the trustee
as custodian for The Depository Trust Company ("DTC"), in New York, New York,
and registered in the name of DTC or its nominee. Each global note will be
credited to the account of a direct or indirect participant in DTC as described
below.
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Except as set forth below, a global note may be transferred, in whole and not
in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in a global note may not be exchanged for notes
in certificated form except as described below under "--Exchanges of Book-Entry
Notes for Certificated Notes."
Exchanges of Book-Entry Notes for Certificated Notes. A beneficial interest in
a global note may not be exchanged for a note in certificated form unless:
. DTC notifies us that it is unwilling or unable to continue as depositary for
the global note or has ceased to be a clearing agency registered under the
Securities Exchange Act of 1934, and in either case we fail to appoint a
successor depositary,
. we, at our option, notify the trustee in writing that we elect to issue the
notes in certificated form,
. an event of default with respect to the notes has occurred and is continuing
or
. other circumstances have occurred that were specified for this purpose in
the designation of a series of notes.
In all cases, certificated notes delivered in exchange for any global note will
be registered in the names and issued in the denominations requested by the
depositary (in accordance with its customary procedures). Any such exchange
will be effected through the DWAC System. An adjustment will be made in the
records of the note registrar to reflect the decrease in the principal amount
of the relevant global note.
Book-Entry Procedures. DTC has indicated that it intends to use the following
procedures for book-entry notes. DTC may change these procedures from time to
time. We are not responsible for these procedures. You should contact DTC or
their participants directly to discuss these matters.
DTC has advised us as follows: DTC is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934. DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants. These book-entry procedures eliminate the need for physical
transfer and delivery of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and other
organizations. Indirect access to the DTC system is available to other entities
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
DTC has advised us that, upon the issuance of a global note under its current
practice, DTC credits the respective principal amounts of the beneficial
interests represented by the global note to the DTC accounts of the
participants through which such interests are to be held. Ownership of
beneficial interests in the global notes will be shown on, and the transfer of
that ownership will be effected only through, records maintained by DTC or its
nominees (for interests of participants) and the records of participants and
indirect participants (for interests of persons other than participants).
AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL NOTE, DTC
OR its NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND
HOLDER OF THE NOTES REPRESENTED BY THE GLOBAL NOTE FOR ALL PURPOSES UNDER THE
INDENTURE AND THE NOTES.
Except in the limited circumstances described above under "--Exchanges of Book-
Entry Notes for Certificated Notes", owners of beneficial interests in a global
note may not have any portions of the global note registered in their names,
will not receive physical delivery of notes in definitive form and will not be
considered the owners or holders of the global note (or any note represented
thereby).
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The laws of some states require that persons take physical delivery in
definitive form of securities that they own. The ability to transfer beneficial
interests in a global note to such persons may be limited to that extent.
Because DTC can act only on behalf of its participants, which in turn act on
behalf of indirect participants and banks, the ability of a person having a
beneficial interest in a global note to pledge such interest to persons that do
not participate in the DTC system, or take other actions in respect of such
interest, may be affected by the lack of a physical certificate.
Payments of the principal of, premium, if any, and interest on global notes
will be made to DTC or its nominee as the registered owner of the global note.
Neither we, the guarantor, the trustee nor our respective agents will be
responsible or liable for maintaining, supervising or reviewing records
relating to or payments made on account of beneficial ownership interests in
global notes.
We expect that DTC or its nominee, upon receipt of any payment of principal or
interest in respect of a global note, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the global note as shown on the records of DTC or its nominee. We
also expect that payments by participants to owners of beneficial interests in
the global note held through these participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers registered in "street name." Such payment will be the
responsibility of the participants.
Interests in a global note will trade in DTC's settlement system. Secondary
market trading activity in these interests will therefore settle in immediately
available funds, subject to the rules and procedures of DTC and its
participants. Transfers between participants in DTC will be effected in
accordance with DTC's procedures and will be settled in same-day funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of notes (including the presentation of notes for exchange as described
below) only at the direction of one or more participants to whose DTC account
interests in global notes are credited. However, if there is an event of
default under the notes, the global notes will be exchanged for notes in
certificated form and distributed to DTC's participants.
Although DTC has agreed to these procedures in order to facilitate transfers of
beneficial interests in global notes among participants of DTC, it is under no
obligation to perform these procedures, and these procedures may be
discontinued at any time. Neither we, the guarantor, the trustee nor our
respective agents are responsible for the performance by DTC, its participants
or indirect participants of their obligations under the rules and procedures
governing their operations.
Optional Redemption
If indicated in the applicable prospectus supplement, we may redeem the notes
at any time, at our option, in whole or in part from time to time, at a
redemption price equal either to:
. the sum of (i) the principal amount of the notes being redeemed plus accrued
interest thereon to the redemption date and (ii) the Make-Whole Amount, if
any, with respect to such notes (or portion thereof) or
. such other redemption price which is established in accordance with the
indenture. ((S) 11.1)
We will redeem notes in accordance with the following procedures, unless
different procedures are set forth in the applicable prospectus supplement.
If notice of redemption has been given and we have provided the funds for the
redemption of the notes to be redeemed on the applicable redemption date, such
notes will cease to bear interest on the redemption date. The only right of the
holders of the notes will then be to receive payment of the redemption price.
((S) 11.7)
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Notice of any optional redemption of any note will be given to holders between
30 and 60 days before the redemption date. The notice of redemption will
specify, among other items, the redemption price and the principal amount of
the notes held by such holder to be redeemed. ((S) 11.5)
We will notify the trustee at least 60 days before giving notice of redemption
(or a shorter period if satisfactory to the trustee) of the principal amount of
notes to be redeemed and their redemption date. If less than all of the notes
of any series are to be redeemed, the trustee will select, in a manner it deems
fair and appropriate, the notes to be redeemed. ((S)(S) 11.3 and 11.4).
All notes that we redeem in full will be canceled and may not be reissued or
resold.
Sinking Fund
If indicated in the applicable prospectus supplement, we may be obligated to
make mandatory sinking fund payments on the notes. Each sinking fund payment
will be applied to the redemption of the applicable series of notes.
Guarantee
The guarantor will unconditionally guarantee the payment of principal of,
premium, if any, and interest on each series of the notes, when the same
becomes due and payable, whether at the maturity date, by declaration of
acceleration, call for redemption or otherwise. If we default in the payment of
the principal of, premium, if any, or interest on the notes, the guarantor will
be required promptly to make such payment in full, without any action by the
trustee or the holder of any notes.
The guarantee is an unsecured obligation of the guarantor and will be
effectively subordinated to mortgage and other secured indebtedness of the
guarantor. In the event of a guarantor insolvency, a creditor may avoid an
intercorporate guarantee in its entirety under federal and state bankruptcy and
fraudulent transfer law if the guarantee impaired the guarantor's financial
condition and was given without receiving reasonably equivalent value in
return. The indenture limits recovery under the guarantee to the highest amount
that would not render the guarantee void against creditors under such laws.
The indenture provides that the guarantor may not, in a single transaction or a
series of related transactions, consolidate with or merge into any other person
or permit any other person to consolidate with or merge into the guarantor,
unless, in addition to other conditions:
(1) in a transaction in which the guarantor does not survive, the successor
entity is organized under the laws of the United States of America or
any state thereof or the District of Columbia and unconditionally
assumes all of the guarantor's obligations under the indenture, unless
we or another guarantor are the successor entity; and
(2) immediately after giving effect to such transaction and treating any
Indebtedness which becomes an obligation of such guarantor or a
subsidiary thereof as a result of such transaction as having been
incurred by such guarantor or such subsidiary at the time of the
transaction, no event of default with respect to the notes of any
series shall have occurred and be continuing.
The guarantee will remain in effect until the entire principal of, premium, if
any, and interest on the notes of each series has been paid in full or the
notes shall have been defeased and discharged as described under clause (A)
under "--Defeasance".
Covenants
The indenture contains, among others, the covenants set forth below. These
covenants may be modified by supplemental indenture for any series of notes
prior to issuance. We will describe any modifications in the
16
applicable prospectus supplement. You should refer to the definitions beginning
on page 23 when reviewing these covenants. When we refer to "Regency Centers"
in this discussion, we mean Regency Centers, L.P.
Limitation on Indebtedness
Regency Centers will not, and will not permit any Subsidiary to, incur any
Indebtedness, if, immediately after giving effect to the incurrence of such
additional Indebtedness and the application of the proceeds of such
Indebtedness, the aggregate principal amount of all outstanding Indebtedness of
Regency Centers and its Subsidiaries on a consolidated basis determined in
accordance with GAAP is greater than 60% of the sum of (without duplication):
(1) Total Assets as of the end of the calendar quarter covered in Regency
Centers' annual report on Form 10-K or quarterly report on Form 10-Q,
as the case may be, most recently filed with the trustee (or such
reports of Regency Centers if filed by Regency Centers with the trustee
in lieu of filing its own reports) prior to the incurrence of such
additional Indebtedness; and
(2) The purchase price of any real estate assets or mortgages receivable
acquired and the amount of any securities offering proceeds received
(to the extent that the proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness) by
Regency Centers or any Subsidiary since the end of the calendar
quarter, including those proceeds obtained in connection with the
incurrence of the additional Indebtedness. ((S) 10.8)
In addition, neither Regency Centers nor any Subsidiary may incur any
Indebtedness secured by any Encumbrance upon any of the property of Regency
Centers or any Subsidiary if, immediately after giving effect to the incurrence
of the additional Indebtedness and the application of the proceeds of such
Indebtedness, the aggregate principal amount of all outstanding Indebtedness of
Regency Centers and its Subsidiaries on a consolidated basis which is secured
by any Encumbrance on property of Regency Centers or any Subsidiary is greater
than 40% of the sum of (without duplication):
(1) the Total Assets of Regency Centers and its Subsidiaries as of the end
of the calendar quarter covered in Regency Centers' annual report on
Form 10-K or quarterly report on Form 10-Q, as the case may be, most
recently filed with the trustee (or such reports of Regency Centers if
filed by Regency Centers with the trustee in lieu of filing its own
reports) prior to the incurrence of the additional Indebtedness; and
(2) the purchase price of any real estate assets or mortgages receivable
acquired and the amount of any securities offering proceeds received
(to the extent that the proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness) by
Regency Centers or any Subsidiary since the end of the calendar
quarter, including those proceeds obtained in connection with the
incurrence of the additional Indebtedness. ((S) 10.8)
Regency Centers and its Subsidiaries must at all times own Total Unencumbered
Assets equal to at least 150% of the aggregate outstanding principal amount of
the Unsecured Indebtedness of Regency Centers and its Subsidiaries on a
consolidated basis. ((S) 10.8)
Regency Centers also will not, and will not permit any Subsidiary to, incur any
Indebtedness if the ratio of Consolidated Income Available for Debt Service to
the Annual Service Charge for the four consecutive fiscal quarters most
recently ended before the date on which such additional Indebtedness is to be
incurred would have been less than 1.5 to 1, on a pro forma basis, after giving
effect to the incurrence of such Indebtedness and to the application of the
proceeds of such Indebtedness and calculated on the assumption that:
(1) such Indebtedness and any other Indebtedness incurred by Regency
Centers or its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds of such Indebtedness,
including Indebtedness to refinance other Indebtedness, had occurred at
the beginning of such period;
17
(2) the repayment or retirement of any other Indebtedness by Regency
Centers or its Subsidiaries since the first day of such four-quarter
period had been incurred, repaid or retired at the beginning of such
period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such Indebtedness during such
period);
(3) in the case of Acquired Indebtedness or Indebtedness incurred in
connection with any acquisition since the first day of the four-quarter
period, the related acquisition had occurred as of the first day of the
period with appropriate adjustments for the acquisition being included
in the pro forma calculation; and
(4) in the case of any acquisition or disposition by Regency Centers or any
Subsidiary of any asset or group of assets since the first day of such
four-quarter period, including, without limitation, by merger, stock
purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Indebtedness had occurred as of
the first day of such period with appropriate adjustments for such
acquisition or disposition being included in such pro forma
calculation. ((S) 10.8)
For purposes of the foregoing provisions, Indebtedness is deemed to be
"incurred" by Regency Centers or a Subsidiary whenever Regency Centers or its
Subsidiary creates, assumes, guarantees or otherwise becomes liable for such
Indebtedness.
Provision of Financial Information
Whether or not Regency Centers is subject to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 or any successor provision, Regency Centers
will timely file with the Securities and Exchange Commission the annual
reports, quarterly reports and other documents which Regency Centers would have
been required to file with the Securities and Exchange Commission if subject to
Section 13(a) or 15(d) or any successor provision. If Regency Centers is not
permitted to file these documents with the Securities and Exchange Commission,
Regency Centers will, within 15 days of each required filing date, file with
the trustee copies of the annual reports, quarterly reports and other documents
which Regency Centers would have been required to file with the Securities and
Exchange Commission and will also supply copies of such documents to any holder
or prospective holder upon written request. ((S) 10.10)
Existence
Except as permitted under "--Merger, Consolidation or Sale", Regency Centers
and the guarantor are required to do all things necessary to preserve their
respective existence, rights and franchises. However, Regency Centers and the
guarantor are not required to preserve any right or franchise if they determine
that the preservation thereof is no longer desirable in the conduct of their
business and that the loss of such right or franchise is not disadvantageous in
any material respect to the holders of the notes. ((S) 10.4)
Maintenance of Properties
Regency Centers is required to maintain all properties used or useful in the
conduct of its business or the business of any Subsidiary in good condition,
repair and working order and supplied with all necessary equipment and to make
all necessary repairs as, in the judgment of Regency Centers, may be necessary
so that its business may be properly and advantageously conducted at all times.
However, Regency Centers is not prevented from discontinuing the operation or
maintenance of any of its properties if such discontinuance is, in the judgment
of Regency Centers, desirable in the conduct of its business or the business of
any Subsidiary and not disadvantageous in any material respect to the holders
of the notes. ((S) 10.5)
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Insurance
Regency Centers and the guarantor are required to, and to cause each of their
respective subsidiaries to, keep all of their insurable properties insured
against loss or damage with insurers of recognized responsibility, in
commercially reasonable amounts and types. ((S) 10.7)
Payment of Taxes and Other Claims
Regency Centers and the guarantor will be required to pay or discharge, before
the same shall become delinquent, (i) all taxes, assessments and governmental
charges levied or imposed upon Regency Centers, the guarantor or any subsidiary
or upon the income, profits or property of Regency Centers, the guarantor or
any subsidiary, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of Regency
Centers, the guarantor or any subsidiary. However, neither Regency Centers nor
the guarantor shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings. ((S) 10.6)
Merger, Consolidation or Sale
Except as provided below, Regency Centers may not, in a single transaction or a
series of related transactions,
. consolidate with or merge into any other person or permit any other person
to consolidate with or merge into Regency Centers,
. directly or indirectly, transfer, convey, sell, lease or otherwise dispose
of all or substantially all of its assets,
. acquire, or permit any Subsidiary to acquire Capital Stock or other
ownership interests of any other person such that such person becomes a
Subsidiary of Regency Centers and
. directly or indirectly purchase, lease or otherwise acquire, or permit any
Subsidiary to purchase, lease or otherwise acquire all or substantially all
of the property and assets of any person as an entirety or any existing
business (whether existing as a separate entity, subsidiary, division, unit
or otherwise) of any person.
Regency Centers may enter into a merger, sale or acquisition described above,
however, if, in addition to other conditions:
. in a transaction in which Regency Centers does not
survive or in which Regency Centers sells, leases
or otherwise disposes of all or substantially all
of its assets, the successor entity to Regency
Centers is organized under the laws of the United
States of America or any state thereof or the
District of Columbia and expressly assumes by a
supplemental indenture all of Regency Centers'
obligations under the indenture;
. immediately before and after giving effect to such
transaction and treating any Indebtedness which
becomes an obligation of Regency Centers or a
Subsidiary as a result of the transaction as
having been Incurred by Regency Centers or such
Subsidiary at the time of the transaction, no
event of default with respect to the notes of any
series, or event that with the passing of time or
the giving of notice, or both, would become an
event of default with respect to the notes of any
series, has occurred and is continuing; and
19
. immediately after giving effect to such
transaction, the Consolidated Net Worth of Regency
Centers (or other successor entity) is equal to or
greater than that of Regency Centers immediately
prior to the transaction. ((S) 8.1)
Paying Agents
We have initially appointed the trustee, acting through its corporate trust
office in Jacksonville, Florida, as paying agent. We may change or terminate
any paying agent, or appoint additional paying agents. However, as long as any
notes remain outstanding, we must maintain a paying agent and a transfer agent
in Jacksonville, Florida, or the Borough of Manhattan, The City of New York. We
will cause the trustee to notify the holders of notes, in the manner described
under "--Notices" below, of any change or termination of any paying agent and
of any changes in the specified offices.
Definitions
Set forth below are the defined terms used in the indenture. You should refer
to the indenture for the definition of any other terms used in this prospectus
for which no definition is provided. ((S) 1.1)
"Acquired Indebtedness" means Indebtedness of a person (i) existing at the time
the person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from the person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, the person becoming a
Subsidiary or the acquisition. Acquired Indebtedness is deemed to be incurred
on the date of the related acquisition of assets from any person or the date
the acquired person becomes a Subsidiary.
"Affiliate" of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For the purposes of this definition, "control," when used with
respect to any person, means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Annual Service Charge" for any period means the aggregate interest expense for
the period on, and the amortization during the period of any original issue
discount of, Indebtedness of Regency Centers and its Subsidiaries and the
amount of dividends which are payable during the period on any Disqualified
Stock.
"Capital Stock" means, with respect to any person, any capital stock (including
preferred stock), shares, interests, participations or other ownership
interests (however designated) of the person and any rights (other than debt
securities convertible into or exchangeable for corporate stock), warrants or
options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means Earnings
from Operations of Regency Centers and its Subsidiaries plus amounts which have
been deducted, and minus amounts which have been added, for the following
(without duplication):
. interest expense on Indebtedness of Regency Centers and its Subsidiaries;
. provision for taxes of Regency Centers and its Subsidiaries based on income;
. amortization of debt discount;
. provisions for gains and losses on properties and property depreciation and
amortization;
. the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for the period; and
. amortization of deferred charges.
20
"Consolidated Net Worth" of any person means the consolidated equity of such
person, determined on a consolidated basis in accordance with GAAP, less
amounts attributable to Disqualified Stock of such person; provided that, with
respect to Regency Centers, adjustments following the date of the indenture to
the accounting books and records of Regency Centers in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or successor opinions
thereto) or otherwise resulting from the acquisition of control of Regency
Centers by another person shall not be given effect.
"Disqualified Stock" means, with respect to any person, any Capital Stock of
the person which by the terms of that Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise
. matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than Capital Stock which is redeemable solely in
exchange for common stock),
. is convertible into or exchangeable or exercisable for Indebtedness or
Disqualified Stock or
. is redeemable at the option of the holder thereof, in whole or in part
(other than Capital Stock which is redeemable solely in exchange for Capital
Stock which is not Disqualified Stock or the redemption price of which may,
at the option of that person, be paid in Capital Stock which is not
Disqualified Stock),
in each case on or prior to the stated maturity of the notes of the relevant
series; provided, however, that equity interests whose holders have (or will
have after the expiration of an initial holding period) the right to have such
equity interests redeemed for cash in an amount determined by the value of the
common stock of Regency Centers do not constitute Disqualified Stock.
"Earnings from Operations" for any period means net earnings excluding gains
and losses on sales of investments, extraordinary items and property valuation
losses, net, as reflected in the financial statements of Regency Centers and
its Subsidiaries for the period determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security interest of
any kind, except any mortgage, lien, charge, pledge or security interest of any
kind which secures debt of any guarantor owed to Regency Centers.
"Indebtedness" of Regency Centers or any Subsidiary means any indebtedness of
Regency Centers or such Subsidiary, as applicable, whether or not contingent,
for
. borrowed money or indebtedness evidenced by bonds, notes, debentures or
similar instruments,
. borrowed money or indebtedness evidenced by bonds, notes, debentures or
similar instruments secured by any Encumbrance existing on property owned by
Regency Centers or any Subsidiary,
. reimbursement obligations in connection with any letters of credit actually
issued or amounts representing the balance deferred and unpaid of the
purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable, or all conditional sale
obligations or obligations under any title retention agreement,
. the amount of all obligations of Regency Centers or any Subsidiary for
redemption, repayment or other repurchase of any Disqualified Stock and
. any lease of property by Regency Centers or any Subsidiary as lessee which
is reflected on Regency Centers' consolidated balance sheet as a capitalized
lease in accordance with GAAP,
21
to the extent, in the case of items of indebtedness under (i) through (iv)
above, that any such items (other than letters of credit) would appear as a
liability on Regency Centers' consolidated balance sheet in accordance with
GAAP, and also includes, to the extent not otherwise included, any obligation
of Regency Centers or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), Indebtedness of another person (other than Regency Centers
or any Subsidiary) (it being understood that Indebtedness shall be deemed to be
incurred by Regency Centers or any Subsidiary whenever Regency Centers or the
Subsidiary creates, assumes, guarantees or otherwise becomes liable in respect
thereof).
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any notes, the excess, if any, of
. the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of each such
dollar if such redemption or accelerated payment had not been made,
determining by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment
had not been made, over
. the aggregate principal amount of the notes being redeemed or paid.
"Reinvestment Rate" means the percentage established by Board Resolution (or,
in the absence of such Board Resolution, 0.25%) plus the arithmetic mean of the
yields under the respective heading "Week Ending" published in the most recent
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the remaining life to
maturity, as of the payment date of the principal being redeemed or paid. If no
maturity exactly corresponds to such maturity, yields for the two published
maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated "H.15(519)" or
any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination under the indenture, then such
other reasonably comparable index designated by Regency Centers.
"Subsidiary" means a corporation, partnership or other entity a majority of the
voting power of the voting equity securities or the outstanding equity
interests of which are owned, directly or indirectly, by Regency Centers or by
one or more other Subsidiaries of Regency Centers. For the purposes of this
definition, "voting equity securities" means equity securities having voting
power for the election of directors, whether at all times or only so long as no
senior class of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of
. Undepreciated Real Estate Assets and
. all other assets of Regency Centers and its Subsidiaries on a consolidated
basis determined in accordance with GAAP (but excluding intangibles).
22
"Total Unencumbered Assets" means the sum of
. those Undepreciated Real Estate Assets not subject to an Encumbrance for
borrowed money and
. all other assets of Regency Centers and its Subsidiaries not subject to an
Encumbrance for borrowed money determined in accordance with GAAP (but
excluding intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original cost
plus capital improvements) of real estate assets of Regency Centers and its
Subsidiaries on such date, before depreciation and amortization, determined on
a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is (i) not subordinated to
any other Indebtedness and (ii) not secured by any Encumbrance upon any of the
properties of Regency Centers or any Subsidiary.
Events of Default
Set forth below are events of default with respect to notes of any series under
the indenture:
(a) we do not pay principal of or premium on any note of that series when
due;
(b) we do not pay any interest on any note of that series within 30 days of
the due date;
(c) we fail to comply with the provisions described under "--Merger,
Consolidation or Sale";
(d) we or the guarantor fail to perform any other covenant or agreement
under the indenture or the notes (other than a covenant or agreement
expressly included in the indenture for the benefit of another series
of notes) for 60 days after we receive written notice of the default
from the trustee or holders of at least 25% in aggregate principal
amount of outstanding notes of that series;
(e) we fail to make any sinking fund payment when due;
(f) we or the guarantor default under the terms of any instrument
evidencing or securing Indebtedness having an outstanding principal
amount of $10.0 million individually or in the aggregate, which default
results in the acceleration of the payment of such indebtedness or
constitutes the failure to pay such indebtedness when due;
(g) we or the guarantor are subject to a final judgment or judgments (not
subject to appeal) in excess of $10.0 million which remains
undischarged or unstayed for 60 days after the right to appeal expires;
(h) events of bankruptcy, insolvency or reorganization affecting us or the
guarantor occur; or
(i) any other event of default provided with respect to the notes of that
series occurs. ((S) 5.1)
We may change, add to or take away from the events of default by supplemental
indenture with respect to any series of notes prior to issuance. We will
describe any such changes, additions or deletions in the applicable prospectus
supplement.
Subject to the provisions of the indenture relating to the duties of the
trustee, if an event of default occurs and is continuing, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request or direction of any of the holders of notes of any series,
unless such holders shall have offered to the trustee reasonable indemnity.
((S) 6.3) Subject to these indemnification provisions, the holders of a
majority in aggregate principal amount of the outstanding notes of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee with respect to the notes of that series. ((S)
5.12)
If an event of default (other than an event of default described in clause (h)
above) occurs and is continuing with respect to the notes of any series
outstanding, either the trustee or the holders of at least 25% in aggregate
23
principal amount of the outstanding notes of that series may accelerate the
maturity of the notes of that series. However, after such acceleration, but
before a judgment or decree based on acceleration, the holders of a majority in
aggregate principal amount of outstanding notes of that series may rescind and
annul such acceleration if all events of default, other than the non-payment of
accelerated principal, have been cured or waived as provided and all expenses
of the trustee are paid. If an event of default specified in clause (h) above
occurs with respect to the notes of any series, the outstanding notes of that
series will become immediately due and payable without any declaration or other
act on the part of the trustee or any holder. ((S) 5.2) For information as to
waiver of defaults, see "--Modification and Waiver".
No holder of any note of any series will have the right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
. such holder has previously given to the trustee written notice of a
continuing event of default with respect to the notes of that series;
. holders of at least 25% in aggregate principal amount of the outstanding
notes of that series have made written request, and offered reasonable
indemnity, to the trustee to institute such proceeding as trustee;
. the trustee has not received from the holders of a majority in aggregate
principal amount of the outstanding notes of that series a direction
inconsistent with such request; and
. the trustee has failed to institute such proceeding within 60 days. ((S)
5.7)
However, these limitations do not apply to a suit instituted by a holder of a
note for enforcement of payment of the principal of and premium, if any, or
interest on such note on or after the due dates expressed in such note. ((S)
5.8)
We must furnish to the trustee quarterly a statement as to our performance of
our obligations under the indenture and as to any default in such performance.
((S) 10.11)
Satisfaction and Discharge of the Indenture
The indenture will cease to be of further effect as to all outstanding notes,
except as to (1) rights of registration of transfer and exchange and our right
of optional redemption, (2) substitution of apparently mutilated, defaced,
destroyed, lost or stolen notes, (3) rights of holders to receive payment of
principal and interest on the notes, (4) rights, obligations and immunities of
the trustee under the indenture and (5) rights of the holders of the notes as
beneficiaries of the indenture with respect to any property deposited with the
trustee payable to all or any of them, if
(a) we have paid the principal of and interest on the notes when due; or
(b) all outstanding notes, except lost, stolen or destroyed notes which
have been replaced or paid, have been delivered to the trustee for
cancellation.
Defeasance
The indenture provides that, at our option, if we irrevocably deposit with the
trustee, in trust, money and/or U.S. government obligations which will provide
money in an amount sufficient in the opinion of a nationally recognized firm of
independent certified public accountants to pay the principal of and premium,
if any, and each installment of interest on the notes,
. we will be discharged from all obligations in respect of any notes or
. we may omit to comply with restrictive covenants and such omission will not
be an event of default under the indenture and the notes.
24
If we elect to omit to comply with restrictive covenants, the obligations under
the indenture other than with respect to such covenants and the events of
default other than the events of default relating to such covenants will remain
in full force and effect.
Such trust may only be established if, among other things:
(1) with respect to clause (A), we have received from, or there has been
published by, the Internal Revenue Service a ruling or there has been a
change in law, which in the opinion of counsel provides that holders of
such notes will not recognize gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will
be subject to Federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred; or, with respect to clause
(B), we have delivered to the trustee an opinion of counsel to the
effect that the holders of such notes will not recognize gain or loss
for Federal income tax purposes as a result of such deposit and
defeasance and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred;
(2) no event of default or event that with the passing of time or the
giving of notice, or both, would become an event of default with
respect to any series has occurred or is continuing;
(3) we have delivered to the trustee an opinion of counsel to the effect
that such deposit will not cause the trustee or the trust so created to
be subject to the Investment Company Act of 1940; and
(4) other customary conditions precedent are satisfied. (Article Thirteen)
Modification and Waiver
We may amend the indenture with the consent of the holders of a majority in
aggregate principal amount of the outstanding notes of each series affected by
the amendment. However, no amendment may, without the consent of the holder of
each outstanding note affected,
. change the stated maturity of the principal of, or any installment of
principal or interest on, any note,
. reduce the principal amount of, the premium or interest on, or the amount
payable upon redemption of any note,
. change the place or currency of payment of principal of, or premium or
interest on, any note,
. impair the right to institute suit for the enforcement of any note,
. reduce the percentage of outstanding notes necessary to amend the indenture,
. reduce the percentage of outstanding notes necessary for waiver of
compliance with the indenture or for waiver of defaults, or
. modify any provisions of the indenture relating to the amendment of the
indenture or the waiver of past defaults or covenants, except as otherwise
specified. ((S) 9.2)
We may also amend the indenture without the consent of any holders of notes to
. reflect a successor to us or to the guarantor which is assuming our
obligations,
. add to our covenants for the benefit of the holders of any series of notes,
. add additional events of default for the benefit of any series of notes,
25
. change provisions of the indenture to the extent necessary to permit the
issuance of notes in bearer or uncertificated form, registrable or not
registrable as to principal, and with or without interest coupons,
. change any provisions of the indenture so long as such change does not apply
to notes outstanding at the time of the change,
. establish.the form or terms of any series of notes,
. reflect a successor trustee or add provisions necessary for the
administration of the indenture by more than one trustee,
. secure the notes,
. maintain the qualification of the indenture under the Trust Indenture Act,
or
. correct any ambiguous, defective or inconsistent provision of the indenture
so long as such correction does not adversely affect holders of any notes in
any material respect.
A supplemental indenture which changes or eliminates any covenant or other
provision of the indenture which was expressly included in the indenture solely
for the benefit of a particular series of notes shall be deemed not to affect
the rights under the indenture of the holders of notes of any other series.
The holders of a majority in aggregate principal amount of the outstanding
notes of each series, on behalf of all holders of notes of such series, may
waive our compliance with restrictive provisions of the indenture. ((S) 10.12)
Subject to rights of the trustee, the holders of a majority in aggregate
principal amount of the outstanding notes of any series, on behalf of all
holders of notes of such series, may waive any past default under the
indenture, except a default in the payment of principal, premium or interest on
any notes of such series. ((S) 5.13)
Notices
The trustee will cause all notices to the holders of the notes to be mailed by
first class mail, postage prepaid to the address of each holder as it appears
in the register of notes. Any notice so mailed will be conclusively presumed to
have been received by the holders of the notes.
PROSPECTIVE PURCHASERS SHOULD NOTE THAT UNDER NORMAL CIRCUMSTANCES DTC WILL BE
THE ONLY "HOLDER" OF THE NOTES. See "--Denomination, Registration, Transfer and
Book-Entry Procedures".
Governing Law
The indenture and the notes are governed by the laws of the State of New York.
The Trustee
Except during the continuance of an event of default, the trustee will perform
only the duties that are specifically set forth in the indenture. During the
existence of an event of default, the trustee will exercise the rights and
powers vested in it under the indenture and use the same degree of care and
skill as a prudent person would exercise under the circumstances in the conduct
of such person's own affairs. ((S)(S) 6.1 and 6.3)
The indenture and provisions of the Trust Indenture Act of 1939 incorporated by
reference in the indenture limit the rights of the trustee, should it become
our creditor, to obtain payment of claims in cases or to realize on property
received as security for any such claim or otherwise. The trustee is permitted
to engage in other transactions with us or any affiliate. However, if it
acquires any conflicting interest (as defined in the indenture or in the Trust
Indenture Act of 1939), it must eliminate such conflict or resign. ((S) 6.8)
Subordination
We will describe the terms and conditions, if any, upon which the notes are
subordinated to our other indebtedness in the applicable prospectus supplement.
Such terms will include a description of the indebtedness ranking senior to
such notes, the restrictions on payments to the holders of such notes while a
default under such senior indebtedness is continuing, the restrictions, if any,
on payments to the holders of such notes following an event of default and
provisions requiring holders of such notes to remit payments to holders of
senior indebtedness.
26
PLAN OF DISTRIBUTION
We may sell the notes through underwriters or dealers, directly to one or more
purchasers, or through agents. We will describe in the applicable prospectus
supplement the terms of the offering of the notes, including the name or names
of any underwriters, dealers or agents, the purchase price of the notes and the
proceeds to us from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters' compensation,
the initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers, and any securities exchanges on which the notes
may be listed.
If underwriters are used in the sale of the notes, underwriters may acquire the
notes for their own account and may resell the notes from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The notes
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as
underwriters. We will name the underwriters for a particular underwritten
offering of notes in the prospectus supplement relating to the offering, and if
an underwriting syndicate is used, we will set forth the managing underwriter
or underwriters on the cover of the prospectus supplement. Unless otherwise set
forth in the prospectus supplement, the obligations of the underwriters or
agents to purchase the notes will be subject to conditions, and the
underwriters will be obligated to purchase all the notes if any are purchased.
The initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If we utilize dealers in the sale of notes, we will sell the notes to the
dealers as principals. The dealers may then resell the notes to the public at
varying prices to be determined by the dealers at the time of resale. We will
set forth the names of the dealers and the terms of the transaction in the
applicable prospectus supplement.
We may sell notes directly or through agents which we designate from time to
time, at fixed prices, which may be changed, or at varying prices determined at
the time of sale. We will set forth the names of any agent involved in the
offer or sale of the notes and any commissions payable by us to the agent in
the applicable prospectus supplement. Unless otherwise indicated in the
prospectus supplement, any agent will act on a best efforts basis for the
period of its appointment.
In connection with the sale of the notes, underwriters or agents may receive
compensation from us or from purchasers of notes for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters,
agents and dealers participating in the distribution of the notes may be deemed
to be underwriters, and any discounts or commissions received by them and any
profit on the resale of the notes by them may be deemed to be underwriting
discounts or commissions under the Securities Act of 1933.
If so indicated in the prospectus supplement, we will authorize agents,
underwriters, or dealers to solicit offers from some types of institutions to
purchase notes at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject only
to those conditions set forth in the prospectus supplement, and the prospectus
supplement will set forth the commission payable for solicitation of such
contracts.
Agents, dealers, and underwriters may be entitled under agreements with us to
indemnification by us against civil liabilities, including liabilities under
the Securities Act of 1933, or to contribution with respect to payments that
such agents, dealers or underwriters may be required to make. Agents, dealers
and underwriters may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business.
The notes may or may not be listed on a national securities exchange. No
assurances can be given that there will be a market for the notes.
27
FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material U.S. federal income tax
considerations applicable to the notes as well as a general summary of the
material federal income tax considerations regarding our general partner,
Regency Centers Corporation. To the extent that the following discussion
constitutes matters of law or legal conclusions, they are based upon the
opinions of Foley & Lardner. This summary is based on current law, is for
general information only and is not tax advice. This discussion deals only with
notes held as capital assets by initial purchasers. This discussion does not
purport to deal with all aspects of taxation that may be relevant to particular
investors in light of their personal investment or tax circumstances, or to
types of holders subject to special treatment under the federal income tax
laws, including insurance companies, tax-exempt organizations, financial
institutions or broker-dealers, traders in securities who elect mark-to-market
treatment, persons who own notes as part of a conversion transaction, as part
of a hedging transaction or as a position in a straddle for tax purposes,
persons whose functional currency is not the U.S. dollar, and persons who own
10% or more of the capital or profits interests in Regency Centers. This
summary does not give a detailed discussion of any state, local, or foreign tax
considerations. This summary is qualified in its entirety by the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the
rules and regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as of the date hereof and all of which are subject
to change (which change may apply retroactively).
As used in this section, the term "Regency Centers" refers to Regency Centers
Corporation and all qualified subsidiaries (a wholly-owned subsidiary which is
not treated as a separate entity for federal income tax purposes) but excludes
Regency Realty Group, Inc. and its subsidiaries (the "Management Company")
(which are treated as separate entities for federal income tax purposes,
although their results are consolidated with those of Regency Centers for
financial reporting purposes).
United States Holders
Payments of Interest
In the opinion of Foley & Lardner, interest on a note will be taxable to a
United States holder as ordinary income at the time it is received or accrued,
depending on the holder's method of accounting for tax purposes. A United
States holder is a beneficial owner that is (1) a citizen or resident of the
United States, (2) a domestic corporation, (3) an estate the income of which is
subject to United States federal income tax without regard to its source or (4)
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
Purchase, Sale and Retirement of the Notes
In the opinion of Foley & Lardner, a United States holder's tax basis in a note
will generally be its cost. In the opinion of Foley & Lardner, upon the sale or
retirement of a note, a United States holder will generally recognize gain or
loss equal to the difference between the amount realized (not including any
amounts attributable to accrued and unpaid interest) and the holder's tax basis
of the note. Long-term capital gain of a non-corporate United States holder is
generally subject to a maximum tax rate of 20% in respect of property held for
more than one year and not more than five years and 18% in respect of property
held for more than five years.
United States Alien Holders
For purposes of this discussion, a "United States Alien holder" is any holder
of a note who is (i) a nonresident alien individual or (ii) a foreign
corporation, partnership or estate or trust, in either case not subject to
United States federal income tax on a net income basis in respect of income or
gain from a note.
In the opinion of Foley & Lardner, under present United States federal income
and estate tax law, and subject to the discussion of backup withholding below:
(1) payments of principal and interest by Regency Centers or any of its
paying agents to any holder of a note that is a United States Alien
holder will not be subject to United States federal withholding tax
28
if, in the case of interest, (a) the beneficial owner of the note does
not actually or constructively own 10% or more of the capital or
profits interest of Regency Centers, (b) the beneficial owner of the
note is not a controlled foreign corporation that is related to
Regency Centers within the meaning of Section 881(c)(3)(C) of the Code
and (c) the person otherwise required to withhold receives, in the
manner provided by the IRS, a certification that the United States
Alien holder is not a United States holder. A United States Alien
holder may provide this certification by providing a properly
completed W-8 BEN or other documentation as may be prescribed by the
IRS. The appropriate documentation must be effective as to the
interest and be provided prior to the payment of such interest. If a
change in circumstances makes any information on such documentation
incorrect, then the United States Alien holder must report the change
within 30 days and provide new documentation;
(2) a United States Alien holder of a note will generally not be subject
to United States federal withholding tax on any gain realized on the
sale of a note; and
(3) a note held by an individual who at death is not a citizen or resident
of the United States will not be includable in the individual's gross
estate for purposes of the United States federal estate tax as a
result of the individual's death if (a) the individual did not
actually or constructively own 10% or more of the capital or profits
interest of Regency Centers and (b) the income on the note would not
have been effectively connected with a United States trade or business
of the individual at the individual's death.
Backup Withholding
Backup withholding of United States federal income tax at the statutory rate
may apply to a payment made in respect of a Note, as well as a payment of
proceeds from the sale of a Note, to a holder (other than a corporation or
other exempt recipient), unless the holder provides certain information. If a
holder (other than a corporation or other exempt person) sells a Note before
the stated maturity to (or through) certain brokers, the broker may be required
to withhold United States federal income tax at the statutory rate on the
entire sale price unless such holder provides certain information and, in the
case of a United States Alien holder, the United States Alien holder certifies
that it is not a United States holder (and certain other conditions are met).
Tax Considerations Regarding Regency Centers
Regency Centers made an election to be taxed as a real estate investment trust
("REIT") under Sections 856 through 860 of the Code commencing with its taxable
year ending December 31, 1993. Regency Centers believes that it has been
organized and operated in such a manner as to qualify for taxation as a REIT
under the Code for such taxable year and all subsequent taxable years to date,
and Regency Centers intends to continue to operate in such a manner in the
future. However, no assurance can be given that Regency Centers will operate in
a manner so as to qualify or remain qualified as a REIT.
The following sets forth only a summary of the material aspects of the Code
sections that govern the federal income tax treatment of a REIT and its
shareholders.
A REIT is defined in the Code as a corporation, trust or association:
(1) which is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares
or by transferable certificates of beneficial interest;
(3) which would be taxable as a domestic corporation, but for Sections 856
through 859 of the Code;
(4) which is neither a financial institution nor an insurance company
subject to provisions of the Code;
29
(5) the beneficial ownership of which is held by 100 or more persons
(determined without reference to any rules of attribution);
(6) not more than 50% in value of the outstanding stock of which is owned
during the last half of each taxable year, directly or indirectly, by
or for "five or fewer" individuals (as defined in the Code to include
entities); and
(7) which meets income and asset tests.
Conditions (1) to (4), inclusive, must be met during the entire taxable year
and condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12
months.
Qualification as a REIT
It is the opinion of Foley & Lardner that (1) Regency Centers has qualified as
a REIT for its taxable years beginning with the taxable year ended December 31,
1993; (2) Regency Centers has been organized in conformity with the
requirements for qualification and taxation as a REIT and (3) Regency Centers'
method of operation has enabled it and will continue to enable it to meet the
requirements for qualification and taxation as a REIT under the Code. It must
be emphasized that this opinion is based on various assumptions and is
conditioned upon representations made by Regency Centers as to factual matters
including, but not limited to, those concerning its business and properties,
its continuing beneficial ownership held by 100 or more persons, and matters
relating to Regency Centers' manner of operation. Foley & Lardner is not aware
of any facts or circumstances that are inconsistent with these factual
representations and assumptions. The qualification and taxation as a REIT
depends upon Regency Centers' ability to meet, through actual annual operating
results, the various income, asset, distribution, stock ownership and other
tests for qualification as a REIT set forth in the Code, the results of which
will not be reviewed by nor be under the control of Foley & Lardner.
Accordingly, no assurance can be given that the actual results of Regency
Centers' operation for any particular taxable year will satisfy the
requirements under the Code for qualification and taxation as a REIT. For a
discussion of the tax consequences of failure to qualify as a real estate
investment trust, see "--Failure to Qualify."
Taxation of Regency Centers
As a REIT, Regency Centers generally is not subject to federal corporate income
tax on its net income that is currently distributed to shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that generally results from an investment in a corporation.
However, Regency Centers will be subject to federal income tax in the following
circumstances.
. Regency Centers will be taxed at regular corporate rates on any
undistributed REIT taxable income, including undistributed net capital
gains.
. Under circumstances, Regency Centers may be subject to the "corporate
alternative minimum tax" on its items of tax preference.
. If Regency Centers has (i) net income from the sale or other disposition of
"foreclosure property" (which is, in general, property acquired by Regency
Centers by foreclosure or otherwise on default of a loan secured by the
property) which is held primarily for sale to customers in the ordinary
course of business or (ii) other non-qualifying net income from foreclosure
property, it will be subject to tax on such income at the highest corporate
rate.
. If Regency Centers has net income from "prohibited transactions" (which are,
in general, sales or other dispositions of property held primarily for sale
to customers in the ordinary course of business other than foreclosure
property), such income will be subject to a 100% tax.
30
. If Regency Centers should fail to satisfy certain gross income tests which
require that at least 75% of the REIT's gross income (excluding gross income
from prohibited transactions) for each taxable year must be derived directly
or indirectly from investments relating to real property or mortgages on
real property (including "rents from real property" and, in certain
circumstances, interest) or from certain types of temporary investments and
at least 95% of the REIT's gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived from such
real property investments described above, and from dividends, interest and
gain from the sale or disposition of stock or securities, or from any
combination of the foregoing, and has nonetheless maintained its
qualification as a REIT because other requirements have been met, it will be
subject to a 100% tax on the income attributable to the greater of the
amount by which Regency Centers fails the 75% test or the amount by which
90% of Regency Centers' gross income exceeds gross income qualifying for the
95% test, multiplied by a fraction intended to reflect Regency Centers'
profitability.
. If Regency Centers should fail to distribute during each calendar year at
least the sum of
(i) 85% of its REIT ordinary income for such year,
(ii) 95% of its REIT capital gain net income for such year, and
(iii) any undistributed taxable income from prior years, it will be
subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed.
. If during the 10-year period (the "recognition period") beginning on the
first day of the first taxable year for which Regency Centers qualified as a
REIT, Regency Centers recognizes gain on the disposition of any asset held
by Regency Centers as of the beginning of such recognition period, then, to
the extent of the excess of (a) the fair market value of such asset as of
the beginning of such recognition period over (b) Regency Centers' adjusted
basis in such asset as of the beginning of such recognition period (the
"built-in gain"), such gain will be subject to tax at the highest regular
corporate rate. Because Regency Centers initially acquired its properties in
connection with its initial public offering in fully taxable transactions,
it is not anticipated that Regency Centers will own any assets with
substantial built-in gain.
. If Regency Centers acquires any asset from a C corporation (i.e., generally
a corporation subject to full corporate-level tax) in a transaction in which
the basis of the asset in Regency Centers' hands is determined by reference
to the basis of the asset (or any other property) in the hands of the C
corporation ("carry-over basis"), and Regency Centers recognizes gain on the
disposition of such asset during the recognition period beginning on the
date on which such asset was acquired by Regency Centers, then, to the
extent of the built-in gain, such gain will be subject to tax at the highest
regular corporate rate.
The result described above with respect to the recognition of built-in gain
during the recognition period assumes Regency Centers will make an election in
accordance with regulations issued by the Internal Revenue Service ("IRS").
In addition, the Management Company is taxed on its income at regular corporate
rates.
Failure to Qualify
If Regency Centers fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, Regency Centers will be subject to tax
(including any applicable corporate alternative minimum tax) on its taxable
income at regular corporate rates. Distributions to shareholders in any year in
which Regency Centers fails to qualify will not be deductible by Regency
Centers nor will they be required to be made. Unless entitled to relief under
specific statutory provisions, Regency Centers will also be disqualified from
taxation as a REIT for the four taxable years following the year during which
qualification was lost. It is not possible to state whether Regency Centers
would be entitled to such statutory relief.
31
ERISA CONSIDERATIONS
The following is a summary of material considerations arising under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the
prohibited transactions provisions of Section 4975 of the Code that may be
relevant to a prospective purchaser. This discussion does not purport to deal
with all aspects of ERISA or Section 4975 of the Code that may be relevant to
particular investors in light of their particular circumstances, including
plans subject to Title I of ERISA, other retirement plans and Individual
Retirement Accounts ("IRAs") subject to the prohibited transaction provisions
of Section 4975 of the Code, and governmental plans or church plans that are
exempt from ERISA and Section 4975 of the Code but that may be subject to the
prohibited transaction provisions of Section 503 of the Code and to state law
requirements.
A FIDUCIARY MAKING THE DECISION TO INVEST IN SECURITIES ON BEHALF OF A
PROSPECTIVE PURCHASER THAT IS AN EMPLOYEE BENEFIT PLAN, A TAX QUALIFIED
RETIREMENT PLAN, OR AN IRA IS ADVISED TO CONSULT ITS OWN LEGAL ADVISOR
REGARDING THE SPECIFIC CONSIDERATIONS ARISING UNDER ERISA, SECTIONS 4975 AND
503 OF THE CODE AND STATE LAW WITH RESPECT TO THE PURCHASE, OWNERSHIP OR SALE
OF THE SECURITIES BY SUCH PLAN OR IRA.
Employee Benefit Plans, Tax Qualified Retirement Plans and IRAs
Each fiduciary of a pension, profit sharing or other employee benefit plan
subject to Title I of ERISA should carefully consider whether an investment in
the notes is consistent with its fiduciary responsibilities under ERISA. The
fiduciary must make its own determination as to whether an investment in the
notes (i) is permissible under the documents governing the ERISA plan, (ii) is
appropriate for the ERISA plan under the general fiduciary standards of
investment prudence and diversification, taking into account the overall
investment policy of the ERISA plan and the composition of the ERISA plan's
investment portfolio, and (iii) would result in a nonexempt prohibited
transaction under ERISA and the Code.
The fiduciary of an IRA or of a qualified retirement plan not subject to Title
I of ERISA because it is a governmental or church plan or because it does not
cover common law employees should consider that such an IRA or non-ERISA plan
may only make investments that are authorized by the appropriate governing
documents and under applicable state law. The fiduciary should also consider
the applicable prohibited transaction rules of Sections 4975 and 503 of the
Code.
LEGAL MATTERS
The validity of the notes and tax matters described under "Federal Income Tax
Considerations" and "ERISA Considerations" will be passed upon for Regency
Centers by Foley & Lardner, Jacksonville, Florida. Attorneys with Foley &
Lardner representing Regency Centers with respect to this offering beneficially
owned approximately 4,100 shares of common stock of our general partner as of
the date of this prospectus.
EXPERTS
The consolidated financial statements and schedule of Regency Centers, L.P. as
of December 31, 2000 and 1999, and for each of the years in the three-year
period ended December 31, 2000, and the consolidated financial statements and
schedule of Regency Centers Corporation as of December 31, 2000 and 1999, and
for each of the years in the three-year period ended December 31, 2000, have
been incorporated by reference herein and in the registration statement in
reliance upon the reports of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. To the extent that KPMG LLP audits
and reports on consolidated financial statements of Regency Centers, L.P. and
Regency Centers Corporation issued at future dates, and consents to the use of
their reports thereon, such consolidated financial statements also will be
incorporated by reference in the registration statement in reliance upon their
reports and said authority.
32
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
-----------
TABLE OF CONTENTS
Prospectus Supplement
Page
----
Regency Centers, L.P. and Regency Centers Corporation...................... S-2
Recent Developments........................................................ S-2
Use of Proceeds............................................................ S-2
Consolidated Ratios of Earnings to Fixed Charges........................... S-2
Disclosure Regarding Forward-Looking Statements............................ S-3
Capitalization............................................................. S-3
Description of the Notes................................................... S-4
Underwriting............................................................... S-7
Validity of Notes.......................................................... S-8
Prospectus
Prospectus Summary......................................................... 1
Where You Can Find More Information........................................ 1
Risk Factors............................................................... 2
Use of Proceeds............................................................ 6
Disclosure Regarding Forward-Looking Statements............................ 6
Consolidated Ratios of Earnings to Fixed Charges........................... 6
Regency Centers, L.P. and Its General Partner.............................. 7
Properties................................................................. 10
The Guarantor.............................................................. 11
Description of the Notes................................................... 12
Plan of Distribution....................................................... 27
Federal Income Tax Considerations.......................................... 28
ERISA Considerations....................................................... 32
Legal Matters.............................................................. 32
Experts.................................................................... 32
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$250,000,000
Regency Centers, L.P.
6.75% Notes due January 15, 2012
Guaranteed as to the Payment
of Principal and Interest by
Regency Centers Corporation
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[LOGO OF REGENCY CENTERS]
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Goldman, Sachs & Co.
JPMorgan
Wachovia Securities
Commerzbank Securities
PNC Capital Markets, Inc.
Wells Fargo Brokerage Services, LLC
SunTrust Capital Markets, Inc.
U.S. Bancorp Piper Jaffray
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