General Growth Refinances Some Debt; Deadline Looms

General Growth Properties, the struggling Chicago real estate behemoth that owns Tysons Galleria, Landmark Mall and the Mall in Columbia, said Friday morning it had refinanced some of its debt, but it still faces a major deadline as it negotiates terms for $900 million worth of mortgages due to be repaid today.

If the company can not get new terms on the $900 million worth of loans related to two Las Vegas properties, which were originally due Nov. 28, the company's banks could declare General Growth in default.

Such an event would trigger cross defaults on other parts of the company's debt, potentially forcing General Growth to declare bankruptcy.

In Friday's announcement, the company said it had completed the refinancing of about $896 million worth of mortgage loans, separate from the debt due on its two Las Vegas properties: The Shoppes at the Palazzo and the Fashion Show Mall. The company said it had used the proceeds from its refinancing to retire a $58 million bond issued by the former Rouse Co. that was due Thursday, as well as refinance about $814 million of mortgage debt scheduled to mature next year.

General Growth took on substantial borrowings when it acquired Columbia-based developer Rouse in 2004, the company's biggest purchase in a time of aggressive expansion.

Last month the company said in a regulatory filing that it may seek bankruptcy protection if it cannot refinance its debt and its lenders declare it in default. General Growth said its malls would stay open if that occurred, but each project the company has in the works would be evaluated "on a case-by-case basis," spokesman Timothy Goebel said on Thursday.

Some local officials and residents around the Washington area are concerned about the future of some of the company's local projects.

Just two months ago, General Growth presented plans for an ambitious overhaul of Columbia's downtown, with 5,500 new townhouses, 1 million square feet of retail space, upgrades to the Merriweather Post Pavilion and extensions for a path around the community's lake.

Alexandria city officials and residents are also concerned. General Growth has been working with the city to redesign the aging Landmark, one of the oldest malls in the region, and some of the area around it.

By Alejandro Lazo  |  December 12, 2008; 11:54 AM ET  | Category:  Economy Watch , Real Estate
Previous: Morning Brief: Mall Owner Faces Debt Deadline | Next: Value Added: On The Christmas Tree Lot

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