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UPDATE 1-General Growth gets extension on $900 mln loan
December 18, 2008 / 6:34 AM / in 9 years

UPDATE 1-General Growth gets extension on $900 mln loan

(Adds details from release and Wall Street Journal, background)

Dec 18 (Reuters) - U.S. mall giant General Growth Properties Inc (GGP.N) said its syndicate of lenders for a $900 million loan has agreed to extend the payment deadline till Feb. 12, 2009.

Last week, all the lenders had agreed to extend the deadline except for Citibank (C.N), which held out on the extension for the loan, originally due Nov. 28, on two Las Vegas malls -- Fashion Show and Shoppes at the Palazzo.

The loan extension comes after six of the banks used pressure tactics on Citigroup Inc on Wednesday, to get it to agree to an extension, according to a Wall Street Journal report.

On Wednesday, the six lenders had threatened an end run to get Citigroup’s cooperation, and said if an extension was not approved, they would not agree to declare the loan due, giving General Growth a de facto extension, the paper said citing people familiar with the talks.

A Citigroup spokesman declined to comment.

Other lenders of the loan are Deutsche Bank AG (DBKGn.DE), Eurohypo AG, Wachovia Corp. WB.N, Bank of America Corp. (BAC.N), Goldman Sachs Co. (GS.N) and an unidentified German lender, the newspaper said.

Lenders for a 2006 loan have also extended the deadline until Jan. 30 for which General Growth has agreed to certain restrictions and covenants, the company said in a statement.

General Growth, the No. 2 mall owner in the United States, has put three of its Las Vegas malls up for sale as it tries to dig out of debt of about $22 billion over the next four years.

The sagging U.S. economy and global credit crunch has hurt mall owners this year as they rely heavily on debt to finance mall purchases and improvements, and weaker business conditions have put a strain on rental income from tenants. (Reporting by Ajay Kamalakaran and Eric Yep in Bangalore; Editing by Valerie Lee)

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