Friday, February 13, 2009

GGP Stays In Talks On Loans

By KRIS HUDSON General Growth Properties Inc. remained locked in negotiations with its lenders as the debt-laden mall owner sought to extend payment deadlines on several expiring loans or face a possible bankruptcy filing. GGP has warned in Securities and Exchange Commission filings that it might need to seek Chapter 11 bankruptcy protection if it fails to win deadline extensions on debts coming due. The Chicago-based company, which owns and manages more than 200 U.S. malls, carries $27 billion in debt amassed in acquisition sprees. It now faces loans coming due on a weekly basis, but it lacks sufficient cash or borrowing capacity to pay them. On Thursday, General Growth had at least four major loans either coming due or past due. The largest is a package of two loans totaling $900 million for which two luxury malls on the Las Vegas Strip are pledged as collateral. When that loan package came due in December, lenders entered a so-called forbearance pact with General Growth in which they pledged not to call the loans due while General Growth tries to sort out its myriad financial problems. That pact was to expire late Thursday. A General Growth representative declined to comment on its talks with lenders. And a representative of Deutsche Bank AG, the bank serving as the agent for others in the Las Vegas loans, declined to comment. General Growth also continued talks Thursday with lenders in a $95 million loan on the Oakwood Center mall in New Orleans. That loan expired Monday, but the two sides entered three consecutive 24-hour extensions to continue negotiating. A separate $225 million loan, arranged by Goldman Sachs Group Inc., remained past due on Thursday. Since the Goldman loan expired Feb. 2, Goldman has refused to grant an extension unless General Growth makes concessions, including paying a higher fee, people familiar with the talks say. A Goldman representative declined to comment. A fourth loan -- a $58 million securitized mortgage on the Chico Mall in Chico, Calif. -- expired Wednesday. The loan's servicer, LNR Capital Corp., a unit of Cerberus Capital, declined to comment. The Chico Mall mortgage is small enough that any foreclosure action by LNR wouldn't trigger cross defaults of other General Growth debts. Write to Kris Hudson at

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