CoolSprings Galleria Mall, Franklin, TN
Source: CBL Properties
Mall owner CBL & Associates stated Wednesday it has actually participated in a forbearance contract with its lending institutions over a missed out on interest payment.
With costs stacking up and a lot of its retail renters deciding to not pay lease throughout the coronavirus pandemic, CBL did not make an $11.8 million payment on June 1 on its 2023 notes, setting off a 30-day grace duration that ended today.
Then, on June 16, CBL stated it would not be making an $18.6 million interest payment due that week on unsecured notes due 2026. That has actually activated another grace duration that ends in the middle of this month.
“The Company is continuing to engage in negotiations and discussions with the holders and lenders of the Company’s indebtedness,” CBL stated in its 8-K filing with the Securities and Exchange Commission on Wednesday. “There can be no assurance, however, that the Company will be able to negotiate acceptable terms or to reach any agreement with respect to its indebtedness.”
It stated the holders of a minimum of 25% of the unsecured notes due in 2023 might now state them to be due and payable instantly.
CBL included that if the payment of its 2023 notes was sped up, it might set off a default for its unsecured notes due in 2024 and in 2026, “which could lead to the acceleration of all amounts due under those notes.”
The business cautioned last month that its capability to continue operating remained in doubt.
The Chattanooga, Tennessee-based realty business, which owns 108 homes mostly in the Southeast, has actually been dealing with consultants Moelis & Co. and Weil, Gotshal & Manges to check out options, which might require a reorganization of the business.
“Given the impact of the COVID-19 pandemic on the retail and broader markets, the ongoing weakness of the credit markets and significant uncertainties associated with each of these matters, the Company believes that there is substantial doubt that it will continue to operate as a going concern,” CBL stated last month.
CBL likewise has actually stated the majority of its renters have actually asked for lease relief throughout the pandemic, and it has actually put a variety of renters in default for not paying.
Several sellers, consisting of J.C. Penney, Neiman Marcus and J.Crew, have actually applied for defense from financial institutions in personal bankruptcy court, however no retail property manager has actually done so.
CBL shares, which trade under $1, are down more than 74% this year. The business has a market price of $52.3 million.
Find the complete Wednesday SEC filing from CBL here.