OREANDA-NEWS. The inaugural senior unsecured notes offering by Washington Prime Group, L.P., a subsidiary of WP Glimcher (NYSE: WPG or the company), was smaller and of a shorter average tenor than Fitch's expectations. As a result, WPG will continue to have drawn borrowings under its bridge agreement longer than expected and will require an additional capital transaction (e.g., a second unsecured bond offering or another long term capital source) over the next year.

PRICING OF SENIOR NOTES
Yesterday WPG priced \$250 million principal amount of 3.85% senior notes due April 1, 2020, to which Fitch assigned a credit rating of 'BBB-'. Closing of the offering is expected to occur on March 24, 2015. The company intends to use the net proceeds from the offering to repay a portion of the outstanding borrowings under its bridge agreement plus accrued and unpaid interest thereon. On Jan. 15, 2015, Washington Prime Group, L.P. borrowed \$1.19 billion pursuant to the \$1.25 billion bridge agreement that was put in place to facilitate the merger of Washington Prime Group, Inc. and Glimcher Realty Trust (previously NYSE: GRT), which formed WP Glimcher.

CREDIT IMPLICATIONS
Together with \$430 million of proceeds from a joint venture announced with O'Connor Mall Partners, L.P., the senior notes offering will result in approximately \$620 million of borrowings outstanding under the bridge agreement, after the redemption of the company's 8.125% series G preferred stock as announced on March 12, 2015. Fitch previously anticipated that the company would issue five-year and 10-year notes to repay all borrowings under the bridge agreement. Since the company only priced five-year notes, Fitch anticipates that WPG will need to access the unsecured bond market again or another long-term capital source over the next year to repay remaining borrowings outstanding under the bridge agreement while also staggering the debt maturity schedule.

RATING SENSITIVITIES
The following factors may have a positive impact on the rating and/or Outlook:
--Fitch's expectation of leverage sustaining below 6.0x (pro forma leverage is 6.8x);
--Fitch's expectation of fixed charge coverage sustaining above 2.5x (pro forma fixed-charge coverage is 2.1x);
--Fitch's expectation of unencumbered assets, using a stressed 8.5% capitalization rate, coverage of net unsecured debt sustaining above 3.0x (this ratio is 2.0x pro forma).

The following factors may have a negative impact on the ratings and/or Outlook:
--Liquidity coverage sustaining below 1.0x (this ratio is 0.6x pro forma);
--Sustained deterioration in operating fundamentals or asset quality (e.g., sustained negative SSNOI results or negative leasing spreads);
--Fitch's expectation of leverage sustaining above 7.0x;
--Fitch's expectation of fixed charge coverage sustaining below 1.8x.

Fitch currently rates WP Glimcher and Washington Prime, Group, L.P. as follows:

WP Glimcher
--IDR 'BBB-'.

Washington Prime Group, L.P.
--IDR 'BBB-';
--\$900 million senior unsecured revolving credit facility 'BBB-';
--\$500 million senior unsecured term loan 'BBB-';
--\$250 million senior unsecured notes due 2020 'BBB-'.

The Rating Outlook is Stable.