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Prime Outlets' co-owner pays off loan

December 17, 2002|by JULIE E. GREENE

julieg@herald-mail.com

HAGERSTOWN - Prime Retail Inc., co-owner of Prime Outlets at Hagerstown, paid off a $90 million mezzanine loan 10 months early, the company announced Monday.

"It's great news for Prime," spokesman Steven Sless said.

The company took out the three-year loan from Fortress Investment Fund in December 2000 to help stave off bankruptcy.

Since then the Baltimore-based company has used proceeds from the sale of six outlet centers, the sale of some strip shopping centers and the partial sale of Prime Outlets at Hagerstown toward paying off the loan, Sless said.

In January, the company sold 70 percent of the local outlet center to a partnership consisting of Prime Retail and Estein & Associates USA Ltd.

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Prime Retail renegotiated the mezzanine loan earlier this year, moving the deadline up to September 2003, Sless said.

By paying off the loan early, Prime Retail saves millions of dollars in interest payments, Sless said. The company was slated to pay 19.75 percent interest on the remaining $30.2 million principal payment before paying it off, he said.

Repaying the loan doesn't have a direct impact on the local outlet center, but gives the company more flexibility to do things with its shopping centers, Sless said.

Sless said Prime Retail has not announced plans at this time for improvements to the local outlet center that opened in August 1998.

The company has not issued dividends since the fourth quarter of 1999 and is "unlikely to pay any dividends in the near future," Sless said.

Instead, the company will use its cash to strengthen its shopping centers by trying to increase occupancy, sales and traffic, Sless said.

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