Prospectus Supplement to Prospectus dated May 9, 2001
REGENCY CENTERS FILED PURSUANT TO
RULE 424 (b) (5)
FILE NO: 333-58966
$20,000,000
Regency Centers, L.P.
7.25% Notes due December 12, 2011
Guaranteed as to the Payment of Principal and Interest by
Regency Centers Corporation
-------------------
Regency Centers, L.P. will pay interest on the notes on June 12 and
December 12 of each year. The first such payment will be made on June 12, 2002.
The notes will be issued only in denominations of $1,000 and even multiples of
$1,000. The notes are not redeemable prior to maturity.
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.................. 100% $ 20,000,000
Underwriting discount.......................... 0.625% $ 125,000
Proceeds, before expenses, to
Regency Centers, L.P.......................... 99.375% $ 19,875,000
The initial public offering price set forth above does not include
accrued interest, if any. Interest on the notes will accrue from December 10,
2001 and must be paid by the purchaser if the notes are delivered after December
10, 2001.
-------------------
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 December 10, 2001.
Wachovia Securities
-------------------
Prospectus Supplement dated December 5, 2001.
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.
USE OF PROCEEDS
The net proceeds to Regency Centers, L.P. from the sale of the notes of
approximately $19.9 million will be used to repay outstanding indebtedness under
our line of credit, which currently accrues interest at a rate equal to LIBOR
plus 1%. Subject to extension or renewal, our line of credit matures in April
2004.
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.
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.
S-2
DESCRIPTION OF THE NOTES
Title: 7.25% Notes due December 12, 2011
Total principal amount being issued: $20,000,000
Due date for principal: December 12, 2011
Interest rate: 7.25% per annum
Date interest starts accruing: December 10, 2001
Interest due dates: Every June 12 and December 12
First interest due date: June 12, 2002
Regular record dates for interest: June 1 for June interest; December
1 for December 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 16.
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 are not permitted to repay the notes early and you have no right
to require us to call the notes.
Sinking Fund: There is no sinking fund.
Defeasance: We may defease the notes, or certain covenants of the notes, as
described under "Description of the Notes--Defeasance" beginning on page 28 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 19 and "Definitions" beginning on page 23, each in the accompanying
prospectus.
o 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:
S-3
(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.
o 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.
o 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 19 of the accompanying prospectus.
o 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 19 and will be subject
to the events of default described under "Description of the Notes-- Events of
Default" beginning on page 26, each in the accompanying prospectus.
S-4
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 14 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.
UNDERWRITING
Regency Centers, L.P., Regency Centers Corporation and First Union
Securities, Inc. ("First Union") have entered into an underwriting agreement and
a pricing agreement with respect to the notes. Subject to certain conditions,
First Union has agreed to purchase all of the notes.
Notes sold by First Union 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 First Union to securities dealers may be sold at a
discount from the initial public offering price. Any such securities dealers may
resell any notes purchased from First Union to certain other brokers or dealers
at a discount from the initial public offering price. If all the notes are not
sold at the initial public offering price, First Union 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 First Union that First Union
intends to make a market in the notes but is 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, First Union 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 First Union 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.
These activities by First Union 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 First Union 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 $30,000.
Regency Centers, L.P. and Regency Centers Corporation have agreed to
indemnify First Union against certain liabilities, including liabilities under
the Securities Act of 1933.
In the ordinary course of their respective businesses, First Union and
its affiliates have engaged, and may in the future engage, in investment
banking, commercial banking and/or corporate trust transactions with Regency
Centers and its affiliates.
First Union Securities, Inc. is an indirect, wholly-owned subsidiary of
Wachovia Corporation. Wachovia Corporation conducts its investment banking,
institutional and capital markets businesses through its various bank,
broker-dealer and nonbank subsidiaries under the trade name of Wachovia
Securities. Any references to Wachovia Securities in this prospectus supplement,
however, do not include Wachovia Securities, Inc., member NASD/SIPC and a
separate broker-dealer subsidiary of Wachovia Corporation and sister affiliate
of First Union Securities, Inc., which may or may not be participating as a
selling dealer in the distribution of the notes.
S-5
VALIDITY OF NOTES
The validity of the notes offered hereby and the guarantee will be
passed upon for Regency Centers and Regency Centers Corporation by Foley &
Lardner, Jacksonville, Florida. The validity of the notes offered hereby and the
guarantee will be passed upon for First Union by Sullivan & Cromwell, New York,
New York.
S-6
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.
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TABLE OF CONTENTS
Prospectus Supplement
Page
Regency Centers, L.P. and Regency Centers
Corporation ..................................................2
Use of Proceeds................................................2
Consolidated Ratios of Earnings to Fixed Charges...............2
Disclosure Regarding Forward-Looking Statements................2
Description of the Notes.......................................3
Underwriting...................................................5
Validity of Notes..............................................6
Prospectus
Prospectus Summary............................................1
Where You Can Find More Information...........................1
Risk Factors..................................................2
Use of Proceeds...............................................6
Consolidated Ratios of Earnings to Fixed
Charges....................................................6
Regency Centers and the Issuer................................7
The Guarantor.................................................9
Description of the Notes.....................................10
Plan of Distribution.........................................24
Federal Income Tax Considerations............................25
ERISA Considerations.........................................29
Legal Matters................................................29
Experts......................................................29
$20,000,000
Regency Centers, L.P.
7.25% Notes due December 12, 2011
Guaranteed as to the Payment
of Principal and Interest by
Regency Centers
Corporation
--------------------
Regency Centers
---------------------
Wachovia Securities
PROSPECTUS
$600,000,000
Notes
Regency Centers, L.P.
121 W. Forsyth Street
Suite 200
Jacksonville, Florida 32202
(904) 356-7000
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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.
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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:
o Our annual report on Form 10-K for the year ended December 31, 2000
(Commission File No. 0-24763); and
o 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.
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Our Debt Financing May Adversely Affect Payment of Notes
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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:
o 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
o 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.
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Increased Interest Rates May Reduce Our Cash Flow
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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
2
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.
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Effective Subordination of Notes May Reduce Amounts Available for Payment of
Notes
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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 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.
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Unsuccessful Development Activities Could Reduce Cash Flow
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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:
o the risk that we may abandon development opportunities and lose our
investment in these developments;
o the risk that construction costs of a project may exceed original
estimates, possibly making the project unprofitable;
o a lack of cash flow during the construction period; and
o 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.
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Loss of Revenues from Major Tenants Could Reduce Our Future Cash Flow
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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:
o files for bankruptcy or insolvency;
o experiences a downturn in its business;
o does not renew its leases as they expire; or
o 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
3
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.
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We Could Be Adversely Affected by Poor Market Conditions in Areas Where
Properties Are Geographically Concentrated
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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.
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Partnership Structure May Limit Flexibility to Manage Assets
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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.
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.
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Uninsured Loss May Adversely Affect Our Ability to Pay Notes
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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.
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Highly Leveraged Transaction or Change In Control May Adversely Affect Credit-
worthiness of Notes
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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.
4
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.
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Tax-Driven Actions by Our General Partner May Reduce Creditworthiness of Notes
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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.
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Security Capital Contractual Limitations May Adversely Impact Our Operations
and Cash Flow
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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 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:
o incurrence of total debt exceeding 60% of the gross book value of its
consolidated assets,
o investments in properties other than shopping centers, and
o 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.
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We Face Competition from Numerous Sources
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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
5
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.
6
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.
7
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:
o focusing on high quality grocer-anchored neighborhood shopping
centers in attractive markets;
o maximizing the value of the portfolio through our
research-based investment strategies, our Premier Customer
Initiative program and our customer-driven development
programs; and
o 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.
8
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.
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:
o of approximately 75,000,
o with an average household income in excess of $71,000, and
o 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:
o strengthen the consumer appeal of a center's grocer-anchor,
o help to stabilize a center's occupancy,
o reduce re-leasing downtime,
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o lower tenant turnover, and
o 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.
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:
o a debt-to-total asset ratio of approximately 41%,
o an interest coverage ratio of 3.0,
o coverage ratio for debt service and preferred unit
distributions of 2.1, and
o 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
10
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.
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.
11
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.
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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:
o $625 million unsecured line of credit,
o $100 million 7-1/8% notes due 2005,
o $200 million 7.40% notes due 2004,
o $50 million 7.75% notes due 2009,
o $150 million 8.45% notes due September 1, 2010,
o $10 million 8.00% notes due December 15, 2010, and
o $220 million 7.95% notes due January 15, 2011.
13
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
14
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;
(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
15
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.
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:
o 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,
o we, at our option, notify the trustee in writing that we elect
to issue the notes in certificated form,
o an event of default with respect to the notes has occurred and
is continuing or
o 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").
16
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).
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
17
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:
o 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
o such other redemption price which is established in accordance
with the indenture. (ss.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. (ss. 11.7)
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. (ss. 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. (ss.ss. 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
18
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 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. (ss. 10.8)
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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. (ss. 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. (ss. 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;
(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
20
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. (ss. 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. (ss. 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. (ss. 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. (ss. 10.5)
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. (ss. 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
21
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. (ss. 10.6)
Merger, Consolidation or Sale
Except as provided below, Regency Centers may not, in a single
transaction or a series of related transactions, o consolidate with or merge
into any other person or permit any other person to consolidate with or merge
into Regency Centers,
o directly or indirectly, transfer, convey, sell, lease or
otherwise dispose of all or substantially all of its assets,
o 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
o 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:
o 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;
o 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
o 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. (ss.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
22
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. (ss. 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):
o interest expense on Indebtedness of Regency Centers and its
Subsidiaries;
o provision for taxes of Regency Centers and its Subsidiaries
based on income;
o amortization of debt discount;
o provisions for gains and losses on properties and property
depreciation and amortization;
o the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations
for the period; and
o amortization of deferred charges.
"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
23
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
o 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),
o is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or
o 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
o borrowed money or indebtedness evidenced by bonds, notes,
debentures or similar instruments,
o 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,
o 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,
o the amount of all obligations of Regency Centers or any
Subsidiary for redemption, repayment or other repurchase of
any Disqualified Stock and
24
o 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,
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
o 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
o 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
25
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
o Undepreciated Real Estate Assets and
o all other assets of Regency Centers and its Subsidiaries on a
consolidated basis determined in accordance with GAAP (but
excluding intangibles).
"Total Unencumbered Assets" means the sum of
o those Undepreciated Real Estate Assets not subject to an
Encumbrance for borrowed money and
o 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;
26
(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. (ss.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. (ss. 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. (ss.
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 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. (ss. 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
o such holder has previously given to the trustee written notice
of a continuing event of default with respect to the notes of
that series;
o 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;
o 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
o the trustee has failed to institute such proceeding within 60
days. (ss.5.7)
27
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.
(ss. 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. (ss.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,
o we will be discharged from all obligations in respect of any
notes or
o we may omit to comply with restrictive covenants and such
omission will not be an event of default under the indenture
and the notes.
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;
28
(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,
o change the stated maturity of the principal of, or any
installment of principal or interest on, any note,
o reduce the principal amount of, the premium or interest on, or
the amount payable upon redemption of any note,
o change the place or currency of payment of principal of, or
premium or interest on, any note,
o impair the right to institute suit for the enforcement of any
note,
o reduce the percentage of outstanding notes necessary to amend
the indenture,
o reduce the percentage of outstanding notes necessary for
waiver of compliance with the indenture or for waiver of
defaults, or
o 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. (ss.9.2)
We may also amend the indenture without the consent of any holders of
notes to
o reflect a successor to us or to the guarantor which is
assuming our obligations,
o add to our covenants for the benefit of the holders of any
series of notes,
o add additional events of default for the benefit of any series
of notes,
o 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,
o change any provisions of the indenture so long as such change
does not apply to notes outstanding at the time of the change,
o establish the form or terms of any series of notes,
29
o reflect a successor trustee or add provisions necessary for
the administration of the indenture by more than one trustee,
o secure the notes,
o maintain the qualification of the indenture under the Trust
Indenture Act, or
o 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.
(ss. 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. (ss. 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. (ss.ss. 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.
(ss. 6.8)
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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.
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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
32
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.
33
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 on the sale or retirement of a note 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.
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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 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 a rate of 31%
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 a rate of 31% of 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.
35
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;
(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, 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
36
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.
o Regency Centers will be taxed at regular corporate rates on
any undistributed REIT taxable income, including undistributed
net capital gains.
o Under circumstances, Regency Centers may be subject to the
"corporate alternative minimum tax" on its items of tax
preference.
o 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.
o 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.
o 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 net income attributable to the greater of the amount by
which Regency Centers fails the 75% or 95% test, multiplied by
a fraction intended to reflect Regency Centers' profitability.
o 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
37
(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.
o 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.
o 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.
38
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
39
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.
40
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.
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TABLE OF CONTENTS
Page
Prospectus Summary............................... 1
Where You Can Find More Information.............. 1
Risk Factors..................................... 2
Use of Proceeds.................................. 7
Consolidated Ratios of Earnings to Fixed
Charges....................................... 7
Regency Centers and its General Partner.......... 8
The Guarantor.................................... 13
Description of the Notes......................... 14
Plan of Distribution............................. 32
Federal Income Tax Considerations................ 34
ERISA Considerations............................. 39
Legal Matters.................................... 39
Experts.......................................... 39
Regency Centers, L.P.
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Regency Centers
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