Debt-Laden General Growth Properties Pursuing Financial, Strategic Alternatives

Story Behind GGP's Debt Predicament, the State of its Portfolio, and the Investment Market's Appetite for U.S. Malls

Facing the prospect of $3.3 billion in maturing debt that comes due next year, the country's second-largest mall owner, General Growth Properties (NYSE: GGP), announced on Monday that its board and management are "pursuing a comprehensive evaluation of its alternatives, both financial and strategic" in an effort to raise capital or arrange additional financing to address its debt issues.

GGP said it will "actively pursue several sources of financing for the company's near-term maturing obligations," until mid to late November, when it expects to be in a position to "offer a long-term fixed-rate portfolio mortgage financing to lenders."

Further, GGP said it is considering generating additional capital through the sale of both core and non-core assets, the sale of joint venture or preferred equity in certain assets, a corporate-level capital infusion, or strategic business merger.

The day of GGP's announcement, Bank of America equity research analyst Christy McElroy said in a published note, "GGP’s pursuit of strategic alternatives is an incremental positive here, in our view."

Source