MHC Obtaining $500MM Loan Pledge

Manufactured Home Communities, Chicago, is in the process of obtaining a $500 million loan commitment from an unnamed institutional lender.The real estate investment trust said the lender will make loans secured by mortgages on 56 heretofore unencumbered properties. The loans will bear a blended annual interest rate of 5.92%, with an average term of about nine years. "This transaction is based upon the company's belief in the stability of its cash flow, and upon the attractive interest rate and financing terms available for our quality assets," said MHC chairman Sam Zell. "We believe the unique nature of MHC's assets allows a higher debt level than is typically appropriate for other REITs." Proceeds from the financing will be used for a special dividend and possibly for share repurchases or other corporate purposes such as debt repayment, redemption of preferred operating partnership units, and property acquisitions. MHC has been authorized to repurchase up to three million shares of its common stock, the REIT said.