General Growth Gets Restructure Accord

November 20, 2009|By Andrea K. Walker | Andrea K. Walker,andrea.walker@baltsun.com

General Growth Properties Inc., the bankrupt owner of most of the region's malls, said Thursday that it has come to an agreement with its creditors to restructure $8.9 billion in debt on 70 loans in a move that could enable those properties to emerge from bankruptcy by the end of the year.

The agreement would extend the maturation dates of the loans, with no loan scheduled to mature before 2014.

The company filed for bankruptcy in April after amassing $27 billion in debt buying malls and shopping centers. Much of its debt came with its acquisition of Columbia's Rouse Co. in 2004.

An attorney for the largest block of General Growth secured creditors said he was happy with the agreement. The lenders are recouping all the costs and amortization they lost during the bankruptcy, said Greg Cross, partner in charge of the bankruptcy division at Venable LLP. They will also recover all principal and interest moving forward, he said. "Economically, all the lenders will be made whole," Cross said. "From the lenders' perspective, it will be as if the bankruptcy didn't occur."

A hearing date for a plan of emergence from bankruptcy was set for Dec. 14.

General Growth has a remaining $6 billion in secured mortgage loans it hopes to renegotiate soon as well as an undisclosed amount of corporate-level and other unsecured debt.

David Fick, an analyst with Stifel Nicolaus, said that General Growth is a healthy company aside from its debt issues. He said the company is a good candidate to be sold.

Simon Property Group, the largest U.S. mall owner, is already emerging as a possible buyer. A spokesman confirmed Thursday that Simon hired investment adviser Lazard Ltd. and law firm Wachtell Lipton Rosen & Katz to help it explore a possible bid for all or part of General Growth.

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