Owner of Paramus Park and Willowbrook Malls May Declare Bankruptcy

In Uncategorized on December 11, 2008 at 3:25 pm

Mall owner’s default risk high

Wednesday, December 10, 2008

NEW YORK — Fitch Ratings downgraded Tuesday the credit ratings of General Growth Properties Inc., which owns shopping centers in Paramus and Wayne, saying default may be imminent for the mall owner.

Fitch noted that General Growth’s recent move to extend the amount of time it has to repay debt and said it thinks the company may need to restructure its debt to avoid bankruptcy. Fitch considers a distressed debt swap, in which a company exchanges its debt for new bonds at a heavily discounted rate, to essentially be a default.

Fitch also said conditions in real estate debt capital markets are hurting General Growth’s ability to raise money to repay about $600 million in 2009 maturing unsecured debt. General Growth, which has 200 malls nationwide, owns the Paramus Park and Willowbrook malls. It is not expected that bankruptcy would affect the malls’ operations or relationships with tenants.

As one of the nation’s largest shopping mall owners, General Growth has been hit hard by the deteriorating U.S. economy and problems at struggling retailers. It also has taken on massive amounts of debt — last month in a regulatory filing, General Growth said nearly $3.1 billion worth of debt will come due next year.

Earlier this month, General Growth reached an interim agreement to extend the time it has to pay back $58 million in notes to Thursday, just days after the Chicago-based real estate investment trust got a two-week reprieve to pay off $900 million in mortgages.

Fitch downgraded the issuer default rating to “C,” its lowest junk rating, from “B” for General Growth Properties Inc., GGP Limited Partnership and unit The Rouse Co. Fitch also downgraded the revolving credit facility, term loan and exchangeable senior notes ratings for GGP Limited Partnership to “CC/RR5” from “B-/RR5.”

General Growth remains on “negative watch,” meaning further downgrades are possible.

Last month, the company reported disappointing third-quarter results and cut its year-end forecast, weeks after the mall owner’s board removed its chief executive, president and chief financial officer. Their ouster came after the company disclosed that former CEO John Bucksbaum’s family trust provided $90 million in personal loans to cover margin debt for the former CFO and president.

New management has warned that crushing debt combined with the declining economy bring the company’s viability into question.

  1. Back to home town shopping.
    We better build that new parking building soon.
    Put more shops in the lower level and get rid of the Christmas tree in the park and put in a mini mall with a Sears and Macy’s.
    What a boon to the town?

  2. The purfect sites for Valley Hospital to purchase and create their new mega hospital.

  3. Despite all of the warning signs, Pfund & Company are still pushing forward with their plan to build a taxpayer-funded parking garage/retail complex on North Walnut Street.

    Time to vote the bums out, just like we did with Harlow and Wiest.

  4. Yea, and the new bums moved our Christmas Tree and substituted it with a dwarf pine covered in recyclable garbage.

  5. Don’t count on many home town businesses to last past the holidays. I own a store in Ridgewood and this season is dismal. Christmas is only two weeks away and I’ve had zero customers pass through my door today (and only five customers so far this week). Right now my sales receipts are worse than they were in September and not even remotely close to what they were a year ago.

    There are already more than a dozen empty retail units downtown. Look for that number to double or triple in the first quarter of 2009.

  6. Oh C’mon 3:09…

    Don’t look at your ACTUAL situation…

    Just listen to the armchair business analysts, Bolger lapdogs and Village Council sycophants as they tell you about the pressing need for more business/retail space and parking.

    Listen to them as they lecture you on how business is only a problem “lately” and that we should keep taxing and building MORE commercial space.

    C’mon… What do YOU know? You are just someone who is ACTUALLY IN BUSINESS and has FIRST HAND KNOWLEDGE of the situation.
    You can’t rely on THAT information.

    NO…You should just listen to the experts as they tell you to fork over MORE MONEY to build more commercial/retail/parking space THAT WE NEED!

    Oh and while you are at it, the Feds will be by shortly to pick up your share of the multi-trillion dollar bailouts.

  7. I say build. It will creat jobs in a desparately declining market, and when this ends Ridgewood will be in a perfect place to reep the onslaught of new businesses.. Think towards the future! Hey, Corzine is ya know..
    You all probably voted HIM in too didn’t ya!?

  8. Oh all, of you bad bad bad critics with your bad bad real news. How dare you complain about anything! We cannot afford to criticize or deal with any reality. Our leaders are always invincible. They can never do any wrong. Just listen to Charlie!

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