Company reported Core Funds From Operations of $0.72 versus consensus of $0.86.
The company is locked with its lenders in some very extreme mutual assured destruction: GGP has $1.2 billion of past due debt and $4.1 billion of debt that can be accelerated, or is in technical default. The company points out "our lenders have not yet exercised any of their remedy rights with respect to such debt." Also, GGP has another $2 billion more of debt that is set to mature in 2009. GGP warns "In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to see legal protection from our creditors."
GGP is refusing to provide FFO guidance for the balance of 2009.
Clearly, the ball is in the creditors court now, who are likely awaiting to see how the ongoing asset sales, among these South Street Seaport and Faneuil Hall, will go before they pull the plug.
From the PR:
2009 Maturing Debt and Liquidity Concerns
We are primarily focused on our near and intermediate term loan maturities. The refinancing market remains at a standstill. We are considering all strategic alternatives and are continuing our discussions with our lenders. In addition, we have suspended our cash dividend, halted or slowed nearly all of our development and redevelopment projects, systematically engaged in certain cost reduction or efficiency programs, reduced our workforce by over 20% and sold certain non-mall assets. We currently have approximately $1.179 billion of past due debt and approximately $4.09 billion of debt that could be accelerated. However, our lenders have not yet exercised any of their remedy rights with respect to such debt. In addition, we have an additional $1.44 billion of consolidated mortgage debt and approximately $595 million of unsecured bonds scheduled to mature in the balance of 2009 that remains to be refinanced, repaid or extended. In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to seek legal protection from our creditors.
Given the uncertainties concerning our ability to refinance maturing loans and the impact of potential strategic alternatives, we will not provide Core FFO guidance for 2009 at this time.
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