Washington Prime may file Chapter 11 to implement restructuring

By Sarah Lizee

Olympia, Wash., March 17 – Washington Prime Group Inc. said it may need to file Chapter 11 bankruptcy in order to implement a financial restructuring of its existing debt, equity interests and other obligations of the company and some of its subsidiaries, according to a press release issued late Tuesday.

Washington Prime said the uncertainty associated with its ability to meet its obligations as they become due raises substantial doubt about its ability to continue as a going concern.

The company said it continues to be open to all discussions with its noteholders and other stakeholders regarding a potential restructuring.

As previously reported, operating partnership Washington Prime Group, LP entered into forbearance agreements with the lenders under three credit facilities and with the holders of more than 67% of its senior notes due 2024 after it failed to make an interest payment on the notes by the interest due date and the subsequent 30-day grace period, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the company missed the $23.2 million interest payment on Feb. 15 and elected to enter the grace period but does not expect to make the payment by the end of that period, which will result in an event of default on March 17.

While an event of default is ongoing under the note indenture, the trustee or holders of at least 25% of the notes may declare the notes immediately payable, and the administrative agent under each credit agreement may declare loans under the respective agreement immediately payable.

Under each forbearance agreement, the relevant parties agree to forbear from exercising their rights and remedies over the missed-interest default.

Each forbearance agreement ends on the earlier of March 31 or the occurrence of certain early termination events.

The credit agreements include an agreement dated Jan. 22, 2018 with Bank of America, NA as administrative agent; an agreement dated Dec. 10, 2015 with GLAS USA LLC as administrative agent; and an agreement dated June 8, 2016 with Huntington National Bank, NA as administrative agent.

In August of 2020, Washington Prime entered into amendments under its credit facilities that provide covenant relief through the third-quarter 2021, according to a previous Prospect News report.

Washington Prime said at that time that the covenant relief was needed due to its inability to collect all of its rents amid the Covid-19 pandemic.

The real estate investment trust is based in Columbus, Ohio.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.