Deadline passes for General Growth's forbearance request on $2.25 billion worth of debt
LOS ANGELES (AP) -- The deadline for General Growth Properties Inc.'s plea for an extension on more than $2 billion in debt expired Monday, but it wasn't immediately clear whether the troubled mall operator convinced any of its bondholders to give it more time to regain its financial footing.
The Chicago-based real estate investment trust, struggling to stave off a Chapter 11 bankruptcy filing, 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.
The consent solicitation, launched by its Rouse Company LP unit, expired at 5 p.m. EDT on Monday, although the terms included the possibility of an extension.
A total of $395 million in unsecured bonds issued by the unit matured Sunday. 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 announced last week, the company 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 also said it was working with 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.
General Growth's shares slipped 3 cents, or 4.7 percent, to end at 61 cents on Monday
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