- The Washington Times - Monday, March 16, 2009

LOS ANGELES (AP) - General Growth Properties Inc. extended its plea for forbearance on more than $2 billion in debt, after the troubled mall operator failed to convince enough of its bondholders to give it more time to regain its financial footing by Monday’s deadline.

General Growth said it has received enough consents from lenders under its 2006 corporate credit agreement, which includes a $1.99 billion term loan and $590 million revolving credit facility, to extend a forbearance agreement currently in place through the end of 2009.

But the Chicago-based real estate investment trust, struggling to stave off a Chapter 11 bankruptcy filing, also had asked holders of $2.25 billion worth of bonds last week to put off calling in payments until the end of this year while it tries to refinance its debt load.

That consent solicitation, launched by its Rouse Company LP unit, was set to expire at 5 p.m. EDT on Monday, but the company said it has extended the offer until 5 p.m. Friday because it had only received enough consents from holders of its 6.75 percent notes due 2013 and 7.20 percent notes due 2012.

Meanwhile, a total of $395 million in unsecured bonds issued by the unit matured Sunday, and went unpaid. Another $200 million is set to come due on April 30.

Calls to spokesman Tim Goebel were not immediately returned Monday.

General Growth, which has a stake in more than 200 malls across 44 states, has seen its fortunes sour as the U.S. economy worsened.

The company has suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20 percent. Its stock has been pummeled, dropping from above $44 a share to well under $1 in the past 12 months.

But the main problem has been a scarcity of credit for refinancing the billions in debt it took on during an aggressive expansion effort that included the $7 billion purchase of a competitor in 2004.

In recent months, the company has sought to get lenders to rework its debt terms but warned last fall it might have to seek bankruptcy protection.

General Growth has said it has $1.18 billion of past due debt and about $4.09 billion worth of debt that could be called in. It also has an additional $1.44 billion worth of consolidated mortgage debt and about $595 million of unsecured bonds scheduled to mature during 2009 that remains to be refinanced, repaid or extended.

In the consent solicitation extended until Friday, the company has asked bondholders not to demand payment of principal and interest on the debt for the rest of this year. Interest on the bonds would still accrue.

General Growth’s shares slipped 3 cents, or 4.7 percent, to end at 61 cents on Monday.


On the Net:

General Growth Properties Inc.: https://www.ggp.com/



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