The clock ticked throughout the weekend for General Growth Properties Inc., which managed to refinance or pay down $872 million in debt on Friday, but not another $900 million in loans maturing at the same time.

This story first appeared in the December 15, 2008 issue of WWD.  Subscribe Today.

The Chicago-based real estate investment trust, which oversees a portfolio of more than 200 malls in 44 states, said Friday it secured about $896 million in mortgage loans, which it will use to retire a $58 million bond that came due Thursday and about $814 million in mortgage indebtedness maturing next year. The maturities on the new financing range from five to seven years.

However, those loans are separate from the $900 million in loans for the Fashion Show and Palazzo properties in Las Vegas, which matured on Friday. The firm said Friday it is continuing to negotiate with its lenders for a further extension but could offer no assurance that it would receive one.

Reacting more to the new financing than to the loans coming due, investors sent General Growth shares skyrocketing on Friday, closing at $1.80, up 36 cents, or 25 percent. Since hitting their 52-week high of $46.59 on Dec. 14, 2007, shares have traded as low as 24 cents, on Nov. 12.

General Growth borrowed heavily to build its retail empire and, as a consequence, most of its assets have been put up to secure borrowed money.

“GGP malls are generally dominant malls in their region,” said Susan Merrick, managing director at Fitch Ratings, on Friday. “If a bankruptcy were to occur, funds necessary for the ongoing capital expenditures utilized for renovation and leasing costs may be limited to excess cash flow from the property or [debtor-in-possession] financing in a Chapter 11 reorganization.”

Merrick said a bankruptcy could make for more vacancies in malls as the company’s leasing arrangements become less productive. The firm might also have trouble keeping its property managers on board.

A Chapter 11 filing, however, would not have an immediate impact on the debt ratings of companies tied to General Growth through commercial mortgage-backed securities, a type of financial instrument that is backed by a loan on a commercial property, Fitch said.

“The likelihood for significant rating actions across transactions with GGP property exposure is slim given their strong performance, moderate leverage and the bankruptcy remote nature of CMBS borrowers,” Merrick said.

The company has more than $3 billion in debt maturing next year. Revenues in its last four quarters totaled $3.39 billion.

General Growth put three of its Las Vegas properties up for sale in October and said it would put construction projects that are not nearing completion on hold.

“We realize we need to generate billions to deleverage the company,” Adam Metz, interim chief executive officer, said on a conference call with analysts last month. “Sales transactions are an important part of our plan. Unfortunately, these transactions take time and, until the deals are completed, there is really nothing to announce. We hope to be able to report some transactions prior to yearend.”

Metz was named interim ceo and Thomas Nolan Jr. interim president last month after the company learned former president Robert Michaels and former chief financial officer Bernard Freibaum received unsecured loans from a Bucksbaum family trust in order to cover margin calls on the purchase of company stock. The Bucksbaum brothers, Martin and Matthew, began expanding on a family grocery business in 1954, building one of the Midwest’s first shopping centers in Cedar Rapids, Iowa. In 1970, the brothers exchanged stock for shares in General Growth, which was listed on the New York Stock Exchange two years later.