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Nordstrom Real Estate Soon to be Fully Unencumbered

Late last week, Nordstrom Inc. announced the closing of the previously announced offering of $250 million aggregate principal amount of its 2.3 percent senior notes due 2024 and $425 million aggregate principal amount of its 4.25 percent senior notes due 2031. The company will use the net proceeds from the sale of the notes with cash on hand to redeem in full the $600 million aggregate principal amount of outstanding 8.75 percent senior secured notes due 2025, which were issued in April 2020 during the onset of the pandemic.

The redemption price for the 2025 notes is equal to 100 percent of the principal amount plus accrued and unpaid interest, including a make-whole premium. The redemption date for the 2025 notes is April 24, 2021. As a result of this redemption, the company’s bond portfolio once again will be entirely unsecured and the real estate used to secure the 2025 notes will be fully unencumbered.

Together, these transactions will reduce annualized interest expense by approximately $30 million beginning in the second quarter of fiscal year 2021. Interest expense in the first quarter of fiscal year 2021 will include charges of approximately $90 million, primarily related to the make-whole premium and unamortized issue costs associated with the 2025 notes.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

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