Prime Retail gets extra time to make payment on loan

Company must pay $15.5 million by Aug. 15

July 06, 2002|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Lenders have given debt-laden Prime Retail Inc. at least an extra six weeks to make a required principal payment - originally due July 1 - on a high-interest loan.

The troubled Baltimore-based outlet shopping center owner has until Aug. 15 to make a $15.5 million payment to Fortress Investment Fund LLC and Greenwich Capital Financial Products Inc. If Prime meets certain undisclosed conditions, the payment deadline could be extended to Oct. 31, Prime said.

Prime received the $90 million loan in December 2000 after defaulting on several loans. It used the funds to pay down debt and to market and improve its outlet properties. Prime has since pared that loan to $35.4 million as of June 30, but the company also has a large amount of debt - about $822 million.

About $335 million of that debt - secured by 15 of Prime's properties - comes due November next year.

Prime officials and their lenders could not be reached for comment yesterday. But Prime officials have said they are focused on paying off the rest of the high-interest $90 million loan as quickly as possible, partly by selling some of its outlet center properties.

Prime has a 176,000-square- foot outlet center for sale in Puerto Rico, one of two such centers on the island.

Prime, which owns or manages 43 outlet centers, including three in Maryland, said in May that it might default on some loans in the current second quarter, but company officials won't confirm any default until after the quarter ends.

Prime's next mandatory principal payment on the loan is due Nov. 1, according to a company statement. The company made a May 1 mandatory payment of $8.9 million.

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