General Growth: Court confirms restructuring of final two major loans

By Caroline Salls

Pittsburgh, April 29 - General Growth Properties, Inc. said the U.S. Bankruptcy Court for the Southern District of New York has confirmed plans of reorganization to restructure its Fashion Show LLC loan and Phase II Mall Subsidiary, LLC loan, the final two major secured mortgage loans in the company's portfolio, according to a company news release.

General Growth said confirmation of both plans means the court has now confirmed plans of reorganization for the debtor subsidiaries associated with 107 of its 108 secured mortgage loans, totaling $14.8 billion.

As a result, 220 General Growth debtors have now completed their plans of reorganization and exited Chapter 11 protection thus far.

"In just one year's time from our bankruptcy filing, we have now received approval to restructure virtually all of our secured mortgage indebtedness after consensual negotiations with our lenders, allowing more than 140 properties to emerge from bankruptcy and continue on their path to growth," General Growth president and chief operating officer Thomas H. Nolan Jr. said in the release.

"Today's confirmations mark yet another significant step in GGP's effort to restructure its capital structure and create a strong financial foundation for its emergence from bankruptcy."

According to the release, the revised terms on the $645.9 million syndicated Fashion Show loan, which is secured by the Fashion Show Mall in Las Vegas, and the $249.6 million Palazzo loan, secured by Las Vegas' Shoppes at the Palazzo, extend the maturity dates on both loans to May 5, 2017.

The interest rates on both were revised to Libor plus 300 basis points, which is 300 bps lower than the rate being paid since the restructuring of these two loans in November 2008.

Including these two loans, General Growth said the weighted average contract interest rate for all $14.8 billion of the confirmed loans is 5.07%, while the all-in interest rate after amortization of fees paid in connection with all of these loans is 5.26%.

The weighted average duration of the loans is 6.5 years from Jan. 1.

Of the 107 loan restructurings confirmed by the court, seven are still awaiting final closing.

General Growth, a Chicago-based real estate investment trust that owns regional shopping malls, master planned community developments and commercial office buildings, filed for bankruptcy on April 16, 2009. Its Chapter 11 case number is 09-11977.

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