Capital Markets

Wendy Silverstein, Executive Vice President – Capital Markets, and Richard Reczka, Vice President, working with Mike, are responsible for executing the capital market transactions that fuel our growth. They do a great job. Access to capital markets in scale and at efficient pricing is a critical aspect of our business franchise. Below is a ten-year schedule of our capital markets activity. Appendix II presents the transaction-by-transaction detail of our 2007 and 2008 to-date activity.

(1) Includes construction loans at face amount.

In mid-2007, the capital markets hit a wall. They have continued to deteriorate. Anticipating that capital markets would close, we acted immediately to improve our already strong balance sheet, laying in more dry powder. First to market, Wendy's team arranged a new, fully committed bank revolving credit facility of $1.6 billion, augmenting our existing $1.0 billion facility. These facilities, which have five-year and four-year terms, are priced at LIBOR plus 55 bps and we pay a 15 bp annual fee. At this date, we have zero borrowed under these facilities and have used $51 million for construction-related letters of credit.

We have adopted the rigorous financial discipline that any discretionary capital expenditures must have a source of financing (as opposed to drawing down our now difficult to replenish cash) and, accordingly, arranged construction loans for four projects. In addition, we financed/refinanced three properties for $745 million, realizing net proceeds of $562 million, which increased our cash balances – yet more dry powder.

Vornado has access to capital, even in these impossible markets.