Macerich Co. Issues $775M 2.25% Exchangeable Senior Notes Due 2031

What Happened
The Macerich Company (via its operating partnership, The Macerich Partnership, L.P.) announced the issuance and sale of $775,000,000 aggregate principal amount of 2.25% Exchangeable Senior Notes due 2031 on August 11, 2026 (this amount includes the full $100M exercise of the initial purchasers’ option). The Notes are senior, unsecured obligations of the Partnership and are fully and unconditionally guaranteed by the Company. Interest is 2.25% per year, paid semi‑annually, and the notes mature August 15, 2031. The offering generated approximately $757.0 million of net proceeds.

Key Details

• Principal and terms: $775.0M aggregate principal; 2.25% coupon; interest payable Feb 15 and Aug 15; maturity Aug 15, 2031.
• Exchange mechanics: Initial exchange rate 35.4761 shares per $1,000 principal (implying an initial exchange price ≈ $28.19/share). Exchanges settle first in cash up to principal, with any excess settled in cash, shares, or a combination (Partnership’s election). Observation Period for pricing = 40 consecutive VWAP trading days. Exchanges restricted before May 15, 2031 except on certain events; freely exchangeable thereafter until just before maturity.
• Net proceeds and use: Net proceeds ≈ $757.0M; about $45.0M used to pay for capped call transactions; remainder intended to refinance secured debt and for general corporate purposes (pending use, funds may be held in short‑term accounts).
• Dilution protection and hedges: Company and Partnership entered into capped call transactions to reduce potential dilution / offset cash payments; initial cap price ≈ $34.06/share (≈45% premium to the Aug 6, 2026 last sale price).
• Other items: Notes are structurally subordinated to liabilities of the Partnership’s subsidiaries. The Company also amended its credit agreement (First Amendment dated Aug 5, 2026) to facilitate the offering. Registration rights were granted to certain holders; added interest may accrue if registration obligations are not met.

Why It Matters
This transaction raises substantial unsecured capital at a relatively low fixed coupon (2.25%), giving Macerich liquidity to refinance secured debt and support general corporate needs while delaying potential equity issuance. The exchangeable structure means holders can convert into company stock under defined conditions, so there is potential future dilution if exchanges occur — but capped calls were purchased to limit that dilution up to a cap price. Investors should watch the company’s use of proceeds (deleveraging of secured debt vs. other uses), upcoming registration filings (which affect additional interest and liquidity of any shares issued on exchange), and the stock price relative to the exchange/cap prices, since those levels affect the likelihood and economic impact of exchanges or redemptions.