General Growth Refinances Seven Malls to the Tune of $1.7B
- Apr 15, 2011
April 14, 2011
By Barbra Murray, Contributing Editor
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.