General Growth Refinances Seven Malls to the Tune of $1.7B

The move is in accord with the REIT's post-bankruptcy goal of reducing outstanding debt.

April 14, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user katutaide

General Growth Properties has orchestrated the refinancing of seven shopping malls with seven new mortgages valued at $1.67 billion. The move is in accord with the REIT’s post-bankruptcy goal of reducing outstanding debt.

GGP’s share of the new mortgages accounts for approximately $1.4 billion.

GGP filed for Chapter 11 bankruptcy protection in April 2009 and emerged later in fall 2010 with a plan of reorganization that provided for a $6.8 billion equity recapitalization and called for the REIT’s eventual repayment, reinstatement or replacement of certain debt. The company’s seven new fixed-rate mortgages produced cash proceeds of $400 million beyond in-place financing for GGP. Additionally, the refinancings reduce the weighted average interest rate from 5.65 percent to 5.33 percent, and result in a term extension of about seven years above the in-place term.

News of GGP’s seven refinancings was accompanied by the announcement that the REIT has also expanded the capacity of its $720 million credit facility to $750 million. In February of this year, GGP had amended and restated what was then a $300 million revolving credit facility–with Deutsche Bank Trust Securities, Wells Fargo Securities L.L.C. and RBC Capital Markets acting as joint lead arrangers–effectively increasing the loan to $720 million.

With the completion of the seven-property refinancings along with cash on hand, GGP’s liquidity position now exceeds $2 billion.