GGP Reaches Agreements On Certain Mortgage-Related Debt

General Growth Properties Inc. (GGP) says it has reached agreements in principle to restructure approximately $8.9 billion of secured mortgage loans.

Key provisions of the agreements include maturity-date extensions resulting in an average loan duration of approximately 6.4 years from Jan. 1, 2010, with no such loan maturing prior to January 2014, and continuation of interest at the current non-default rate.

The weighted average contract interest rate for the 70 loans covered by these agreements is 5.35%. The all-in-interest rate after amortization of fees paid in connection with these loans is 5.54%.

‘We are extremely pleased to reach this consensual agreement with lenders representing more than half of the mortgage debt covered by the bankruptcy proceedings,’ says Thomas H. Nolan Jr., GGP's president and chief operating officer. "We believe that these agreements provide a basis for consensually completing a restructuring of the debtors' remaining approximately $6 billion of secured mortgage loans, and we are hopeful that our other secured mortgage lenders will work with us to reach agreements quickly."

Nolan says the company is working with an unsecured-creditors committee and an equity committee to resolve the restructuring of GGP's corporate-level debt and equity.

The agreements are subject to various conditions and approvals, including completion of definitive documentation and approval of the bankruptcy court in the Southern District of New York, where GGP and approximately 166 regional shopping centers and certain other GGP subsidiaries filed for Chapter 11 bankruptcy protection in April.

In addition, some of the loan extensions remain subject to the approval of the Class B noteholders or mezzanine holders. GGP says it is currently engaged in discussions with these mortgage lenders regarding the definitive documentation and expects to file the plan of reorganization and related disclosure statement with the bankruptcy court expeditiously.

SOURCE: General Growth Properties Inc.


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