Macerich Dilutes Shareholders to Strengthen Balance Sheet
Macerich (NYSE: MAC) owns some of the best malls in the United States. Its highly productive urban and suburban properties continue to attract desirable tenants, giving them a long-term competitive advantage.
Nevertheless, Macerich entered 2020 with one big weakness: a balance sheet loaded with debt. The COVID-19 pandemic crushed mall traffic and rent collections, exposing this weakness in stark fashion. During 2021, Macerich has been forced to issue a ton of stock -- diluting existing shareholders -- in order to shore up its balance sheet. Let's see what that means for investors going forward.
As rent collections plunged last year, Macerich relied on its $1.5 billion revolving credit facility as its main source of liquidity. That approach worked in the short term. However, the facility was set to mature in July 2021, so the mall REIT had to either extend the maturity date or find an alternative source of financing.
Source Fool.com