Citi Plays Hardball With GGP

Details creep out about the weekend's negotiations over General Growth's debt extension.

Citigroup last week scuttled a proposed nine-month extension of General Growth's payment deadline on $900 million in debts by withholding its approval and demanding a concession on a different loan in return, according to people familiar with the talks. Six other banks had agreed to the nine-month extension of the Nov. 28 deadline, making Citigroup the lone holdout, these people say.

When General Growth and Citigroup couldn't resolve their issues, the group on Sunday settled for a two-week extension to sort out the issue. If the banks don't approve a further extension by the new, Dec. 12 deadline, they could declare General Growth in default on that debt, triggering cross defaults on other General Growth debts and forcing the company to seek bankruptcy protection. Representatives of Chicago-based General Growth and Citigroup declined to comment.

In another twist to the Citigroup-General Growth saga, Citigroup disclosed Thursday in a Securities and Exchange Commission filing that it had bought 14.2 million General Growth shares, amounting to 5.3% of the total. That purchase is tied to an accumulation of the company's stock by Pershing Square Capital Management LP, a hedge fund controlled by William Ackman.

Pershing reported late last month that it had acquired 20.8 million General Growth shares, or 7.5% of the total, and had lined up swap contracts with Citigroup, Morgan Stanley and UBS AG to potentially buy more. Morgan Stanley reported earlier this week that it had bought 5.1% of General Growth's shares.

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Past links and stories:

• December 3, Centro, GGP Find Ways to Hang On
• December 1, GGP Gets Two Week Extension
• November 25, Ackman Builds Stake in GGP
• November 20, General Growth Hires Bankruptcy Advisor
• November 17, General Growth Downgraded; Feldman to Stop Filing Public Reports
• November 12, General Growth Roundup
• November 11, General Growth Warns of Default
• November 5, GGP, Kimco Fall After Cutting Forecasts
• November 2, General Growth "Almost Literally Worth Nothing"
• October 17, Management Changes at GGP
• October 15, Margin Calls Hit Two More Retail REITs
• October 7, General Growth Near Bankruptcy?
• October 3, General Growth CFO Steps Down; Company Suspends Dividend
• October 2, GGP Under Fire for Inclusion on Short-Sell Ban List
• October 1, Could General Growth Be Sold?
• September 23, Short Selling Banned on General Growth
• September 22, General Growth Strikes Back
• September 16, General Growth Offers More Recourse
• August 12, Another Look at GGP's Debt
• August 6, Analysis of GGP's Debt
• July 25, Stories With Bigger Implications?
• July 14, GGP Lines Up New Financing
• April 16, GGP's Growing Debt Problem