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Regency Centers sells pioneering 'green bonds'

By Mark Basch, Contributing Writer

A couple of weeks ago, Regency Centers Corp. announced the sale of $250 million in bonds. An announcement like that is typically unremarkable, but this was actually a significant milestone.

These particular bonds are known as “green bonds,” which are used to fund environmentally friendly projects. According to The Wall Street Journal, Jacksonville-based Regency became the first U.S. non-bank corporation to sell green bonds.

“I think it relates to our commitment to always being an industry leader, and that includes sustainability,” Regency Chairman and CEO Martin “Hap” Stein said.

The bond sale came days after Regency was honored by the U.S. Department of Energy’s Better Buildings Alliance and the Institute for Market Transformation as an inaugural “Green Lease Leader.”

In its sales prospectus for the bonds, the shopping center development company said the $250 million will be used to fund “eligible green projects” which are certified under the Leadership in Energy and Environmental Design program, or LEED.

Besides the altruistic benefits of being environmentally friendly, green bonds also have financial benefits. Regency seems to be saving money by going green.

The bonds appeal to investors who are looking to be socially responsible and may be willing to sacrifice a small amount of return in exchange. According to the Journal, while Regency’s bonds were priced with a 3.812 percent yield for investors, a $250 million bond issue by another real estate company with a similar credit rating, Lexington Realty Trust, was priced the same week with a yield of 4.414 percent.

Fitch Ratings outlined other benefits in a report on Regency’s green bonds.

“We believe the benefits of going green are not limited solely to broadening the creditor base, but also include increasing operational efficiencies, improving portfolio competitiveness and, over the longer term, reducing potential contingent liabilities,” Fitch said in a news release.

“Altruistic behavior by issuers is commendable, but only relevant to stakeholders when it affects recurring free cash flows. To date, we have seen issuers improve top-line growth and reduce operating expenses by going green,” it said.

Stein Mart earnings down slightly

Stein Mart Inc. on Thursday reported slightly lower earnings for the first quarter ended May 3.

The Jacksonville-based fashion retailer had adjusted earnings of 32 cents a share, matching the average forecast of analysts, according to Thomson Financial, but a penny lower than last year.

“While our earnings did not quite beat last year, we’re certainly off to a good start, I believe,” Chairman and CEO Jay Stein said in a conference call with analysts.

Stein Mart’s February and March sales were affected by bad weather in much of the country, just like many other retailers. However, sales improved with the weather in April and the company ended the quarter with a 2.6 percent increase in comparable-store sales.

Comparable-store sales are sales at stores open for more than one year and are a key indicator of a retailer’s performance.

Avondale Partners analyst Mark Montagna is projecting Stein Mart’s comparable-store sales to increase by 4 percent in the second quarter.

Stein said first-quarter earnings were also impacted by investments in new stores and in its e-commerce business.

Stein Mart opened one new store in the first quarter, closed two and relocated three others, ending the quarter with 263 stores.

The company plans to open a total of 10 new stores this year and relocate six to other locations.

Wound care company agrees to buyout

Private equity firm Clayton, Dubilier & Rice last week announced a deal to buy Jacksonville-based Healogics Holding Corp., which manages nearly 600 wound care centers across the country.

Healogics, currently owned by Metalmark Capital and Scale Venture Partners, has about $300 million in annual sales and employs about 2,000 people, Clayton, Dubilier & Rice said.

The firm said the buyout is valued at $910 million, but it did not give more details about terms.

The deal is expected to close in the second or third quarter this year.

Latitude 360 extends merger plan

Latitude 360 had planned to be a public company by now, but the company announced the closing of its merger with an existing public company is now expected to be this week.

Jacksonville-based Latitude 360, which operates the Latitude 30 restaurant and entertainment venue in Jacksonville and two similar venues in Pittsburgh and Indianapolis, agreed in March to merge with Kingdom Koncrete Inc., a Texas concrete company. Latitude 360 will be the surviving company after the merger.

The deal was originally scheduled to close by May 2, but Latitude 360 said it extended the closing to May 30 to bring some of Kingdom Koncrete’s expertise into the company.

Latitude 360 announced plans to build its fourth restaurant and entertainment venue in Albany, N.Y., and hopes to continue to expand. It said Kingdom Koncrete’s experience in the concrete industry will be an asset to its growth plans.

Under the new agreement, Kingdom Koncrete’s business will be retained as a subsidiary of Latitude 360.

Watts resigns from CSX board

CSX Corp. said in a Securities and Exchange Commission filing that former U.S. Rep. J.C. Watts resigned from its board of directors.

Watts had been a board member since 2011 and had just been re-elected to the board at the Jacksonville-based company’s annual meeting on May 7.

CSX said in the filing that he decided to resign “as a result of competing professional demands.”

“There are no disagreements between Mr. Watts and the company on any matters relating to the company’s operations, policies or practices,” it said.

PHH reported close to fleet management deal

PHH Corp.’s stock jumped $2.62 to $23.78 Wednesday after Reuters news service reported that Canadian equipment finance company Element Financial Corp. is negotiating to buy PHH’s fleet management services business.

After the market closed on Wednesday, PHH did confirm it was “engaged in discussions” to sell the business, but it gave no other details.

PHH said in February it was considering splitting its two businesses, mortgage banking and fleet management, into two separate companies or selling one or both of them.

During its quarterly conference call three weeks ago, CEO Glen Messina said the company expected “to reach a conclusion” on its plans by the end of the second quarter.

Reuters, citing an unnamed source, said the deal with Element could come in the next two weeks.

WWE’s stock plunges again

Last month, we told you how Intrepid Capital Management Inc. seemed to make a smart business decision by selling off its stake in World Wrestling Entertainment Inc. before the stock plunged.

As it turned out, Intrepid made a really smart decision because the stock plunged even more this month.

Before selling off all of its shares, Jacksonville Beach-based Intrepid was the second-largest stockholder of the professional wrestling promoter, behind the family of WWE founder Vince McMahon.

It sold off its stake as the stock was rising to a high of $31.98 in March, so it was out of the stock when it fell as low as $19.63 in April.

The April drop was attributed to disappointing subscriber figures for the launch of WWE’s online streaming network.

Then on May 16, the stock fell as much as $9.38 to $10.55 after the company announced new television deals for its shows

on the USA and Syfy cable networks.

WWE did not announce the terms of the deals, and that led investors to believe that the company is getting less money than they had hoped.

Along with that announcement, WWE gave projections for 2015 earnings, saying its operating income before depreciation and amortization expenses could be between $125 million and

$190 million. The wide range in that projection apparently raised additional concerns on Wall Street.

Medtronic earnings up

Medtronic Inc. last week reported adjusted earnings of $1.12 a share for the fourth quarter ended April 25, 2 cents higher than the previous year and equaling the average forecast of analysts surveyed by Thomson Financial.

The adjusted earnings do not include a $746 million pre-tax litigation charge related mainly

to the settlement of a patent dispute with Edwards Lifesciences Corp.

Medtronic said revenue in its surgical technologies division, which is headquartered in Jacksonville, rose by 8 percent to $438 million in the quarter. When adjusted for currency fluctuations on its foreign sales, revenue rose 9 percent.

Minneapolis-based Medtronic said total revenue rose 2 percent to $4.566 billion, or 3 percent after currency adjustments.

Medtronic also forecast fiscal 2015 earnings of $4 to $4.10 a share, which is line with the average analysts’ forecast of $4.08.

mbasch@baileypub.com

(904) 356-2466

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