The prospectus was filed as the company is issuing $300 million in senior notes due in 2024.
The prospectus warns "investing in the notes involves significant risks."
The company's staggering debt load is chief among those risks:
As of June 30, 2014, the Operating Partnership's total consolidated indebtedness was approximately $4.8 billion (excluding unamortized debt premiums and discounts). We have $1.3 billion of borrowing capacity under revolving credit facilities, under which approximately $919 million was available at June 30, 2014.
Our level of indebtedness and the limitations imposed on us by our debt agreements could have significant adverse consequences to holders of the notes, including the following:•our cash flow may be insufficient to meet our debt service obligations with respect to the notes and our other indebtedness, which would enable the lenders and other debtholders to accelerate the maturity of their indebtedness, or be insufficient to fund other important business uses after meeting such obligations;
•we may be unable to borrow additional funds as needed or on favorable terms;
•we may be unable to refinance our indebtedness at maturity or earlier acceleration, if applicable, or the refinancing terms may be less favorable than the terms of our original indebtedness or otherwise be generally unfavorable;
•because a significant portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense;
•increases in interest rates could also materially increase our interest expense on future fixed rate debt;
•we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;
•we may default on our other unsecured indebtedness;
•we may default on our secured indebtedness and the lenders may foreclose on our properties or our interests in the entities that own the properties that secure such indebtedness and receive an assignment of rents and leases; and
•we may violate restrictive covenants in our debt agreements, which would entitle the lenders and other debtholders to accelerate the maturity of their indebtedness.
CBL and Associates has said it will sell off some of its malls and has already sold some. It is not known whether Northpark Mall is on the list.
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4 comments:
WELL city of Joplin will just pay there note off for North Park Mall.......
It is funny how the super rich refer to everyone else as leaches and dead beats.
It makes complete sense now...... Has anyone noticed that in the past year several businesses have closed down in the mall? Things Remembered was there since the mall opened and they tried to raise their rent by $20,000. Lots of other businesses were having their rent doubled for the holiday season. They will have the mall full for the holiday with seasonal vendors, but as soon as the season is over the mall will be dead again.
Then there is always the fact that the parking lot was halfway done and they convinced the city an added 1% tax was needed. They were just trying to afford what they already did.
The best thing for Northpark Mall would be for it to be sold from CBL.
Real estate companies have high debt. $4.8 billion is not unreasonable for a company of that size.
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