General Growth Properties and CIT Group hope to exit Chapter 11 proceedings next month.
This story first appeared in the November 20, 2009 issue of WWD. Subscribe Today.
General Growth said on Thursday it has reached an agreement with lenders to extend the due dates on its mortgages by almost five years, with interest continuing at the “current nondefault rate.” The mall operator said the average interest rate for the 70 loans covered by the agreements is 5.35 percent.
If approved by the bankruptcy court, none of the 70 loans would mature before Jan. 1, 2014.
“We are extremely pleased to reach this consensual agreement with lenders representing more than half of the mortgage debt covered by the bankruptcy proceedings,” said Thomas H. Nolan Jr., 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.”
General Growth said it wants to emerge from bankruptcy by yearend. The mall operator and 166 regional shopping centers filed for bankruptcy court protection in Manhattan in April. A court date is set for Dec. 14. Not all of its regional shopping centers are part of the filing.
Competing real estate investment trust Simon Properties is said to be considering a bid for some assets of General Growth.
Meanwhile, CIT, the primary lender to many small and medium-size businesses, said Thursday it has in “excess” of the minimum support needed from bondholders eligible to vote on its prepackaged restructuring plan. CIT filed for Chapter 11 in Manhattan on Nov. 1.
A court hearing on approval of the proposed plan is set for Dec. 8.
CIT on Monday posted a $1.07 billion third-quarter loss, due mostly to higher reserves set aside for credit losses from a year ago.