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GGP's Lenders Waive Default; REIT Asks for Further Forbearance


General Growth seems to have struck a major breakthrough with lenders. Lenders have waived default on a $2.58 billion credit agreement until the end of the year, giving the REIT some much needed breathing room as it seeks to avoid filing for bankruptcy protection. It's not out of the woods yet, however. It is still seeking forbearance on more than $2 billion in additional debt. If it can't get that, bankruptcy remains a real possibility.

In other news, William Ackman is seeking a seat on General Growth's board of directors. (He's also seeking seats on Target's board.)

But the real estate investment trust's subsidiary, The Rouse Company LP, did not reach agreement on a similar forbearance from holders of $2.25 billion in debt. It extended the expiration date for the so-called consent solicitation it had previously announced until March 20 from March 15.

General Growth, which faces $27 billion of debt maturing over the next four years, warned last week it was already past due on $1.18 billion of debt -- not including the Rouse Company notes -- and that this threatened the firm's liquidity position.

Hedge fund manager William Ackman, one of the company's biggest shareholders, told Bloomberg Television on Monday that he expects the company to file for bankruptcy "imminently."

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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