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united states of america objects to plan of reorganization:
same general type of objection as i outlined in the u.s. trustee's objection. usa said they would be satisfied if the following language were included:
again, expect to see some type of mutually agreeable language inserted either before the court hearing on wednesday or in court on wednesday.
33. For the foregoing reasons, the Government respectfully objects to the Plan. The
Plan should not be confirmed to the extent that it seeks to release parties other than the Plan
Debtors from any potential claims by the Government. The language releasing non-debtors from
any potential claims by the Government should be stricken, or in the alternative, the following
language, as requested by the United States Trustee and this Office, should be added to the Plan
and confirmation order:
Nothing in the Confirmation order or the Amended Plan of Reorganization
shall effect a release of any claim by the United States Government or any
of its agencies or any state and local authority whatsoever, including
without limitation any claim arising under the Internal Revenue Code, the
environmental laws or any criminal laws of the United States or any state
and local authority against the Released Parties, nor shall anything in the
Confirmation Order or the Plan of Reorganization enjoin the United States
or any state or local authority from bringing any claim, suit, action or other
proceedings against the released parties for any liability whatever,
including without limitation any claim, suit or action arising under the
Internal Revenue Code, the environmental laws or any criminal laws of the
United States or any state or local authority, nor shall anything in the
Confirmation Order or the Amended Plan of Reorganization exculpate any
party from any liability to the United States Government or any of its
agencies or any state and local authority whatsoever, including any
liabilities arising under the Internal Revenue Code, the environmental laws
or any criminal laws of the United States or any state and local authority
against the Released Parties.
imo, no.
but remember, the advice you got is worth what you paid for it.
united states trustee objects to plan of reorganization:
while the u.s. trustee filed its objection, it implied if the following language were to be included in the plan that the u.s. gov't and its various entities would be satisfied.
look for some type of mutually agreeable carve-out language to be inserted to satisfy this objection.
Carve-Out Of Governmental Claims
Finally, the Plan also fails to include the appropriate language carving out government
claims from the proposed releases. The governmental carve-out set forth in section 10.9 of the
Plan is limited to environmental claims and is not sufficiently extensive. The United States
Trustee requests that the Debtors add the following language to their release provisions:
Nothing in the Confirmation order or the Amended Plan of Reorganization shall
effect a release of any claim by the United States Government or any of its
agencies or any state and local authority whatsoever, including without limitation
any claim arising under the Internal Revenue Code, the environmental laws or any
criminal laws of the United States or any state and local authority against the
Released Parties, nor shall anything in the Confirmation Order or the Plan of
Reorganization enjoin the United States or any state or local authority from
bringing any claim, suit, action or other proceedings against the released parties
for any liability whatever, including without limitation any claim, suit or action
arising under the Internal Revenue Code, the environmental laws or any criminal
laws of the United States or any state or local authority, nor shall anything in the
Confirmation Order or the Amended Plan of Reorganization exculpate any party
from any liability to the United States Government or any of its agencies or any
state and local authority whatsoever, including any liabilities arising under the
Internal Revenue Code, the environmental laws or any criminal laws of the
United States or any state and local authority against the Released Parties.
around $0.31/share dividend
4. GGP seeks authorization to maintain its REIT status and avoid entity level
income taxes and the Excise Tax by declaring and paying a dividend equal to 100% of its taxable
income, which dividend shall be paid partially with GGP common stock and partially with cash.
Stockholders will be given an election to receive their dividend in either cash or common stock,
subject to a 10% cap on the aggregate portion of the dividend to be paid in cash. GGP currently
estimates its 2009 dividend obligation to be $101 million, of which $90.9 million will be paid in
stock and $10.1 million in cash.3
3 This figure is a current estimate, and the Debtors’ are working diligently to prepare final numbers. It is
possible that the amounts cited herein, including the Excise Tax, could vary by as much as 20-30%.
$101 million spread over 323 million shares = $0.31/share
i can't remember exactly how many shares outstanding but 323 million is close. however, the dividend number may be reduced due to any preferred shares not accounted for. i believe the trust did not convert all of its preferred shares to common but i just can't remember how many are left and i don't want to dig through the annual report to get the information. have to believe that dividend should be around $0.25 when all is said and done.
would have expected to see some information that shareholders of record as of "x" date would get the dividend but i can not find the record date in what i have read so far.
this stock should rock tomorrow!
hearing on attached order set for 12/18
1. The Motion is granted to the extent provided herein;
2. The Debtors’ are permitted to declare and pay such dividends and
distributions for the 2009 taxable year to enable GGP to maintain its qualification as a
REIT and to avoid payment of entity level income taxes and the Excise Tax (the
“Dividend”);
3. Any REIT-related dividend made by GGP shall be declared and
paid in cash and GGP common stock with the cash portion thereof limited, in the
aggregate, to 10% of GGP’s REIT-related dividend obligation;
4. The Debtors’ directors and officers, as applicable, are authorized to
take such steps necessary to implement and effectuate the declaration and payment of the
Dividend;
5. The Debtors are authorized to take all actions necessary to
effectuate the relief granted pursuant to this Order in accordance with the Motion.
6. Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 7062 and 9014 or otherwise, the terms and conditions of this Order shall be
immediately effective and enforceable upon its entry.
7. The Court retains jurisdiction with respect to all matters arising
from or related to the implementation of this Order.
Date: ______________, 2009
New York, New York
____________________________________
THE HONORABLE ALLAN L. GROPPER
UNITED STATES BANKRUPTCY JUDGE
dividends on the way!!
6. As is more fully described in the Dividend Motion, maintaining GGP’s
status as a REIT and avoiding entity level income taxes inures to the benefit of all of the
Debtors’ stakeholders. In order to remain a REIT and avoid such adverse tax consequences
without incurring an excise tax in the amount of approximately $3,434,000, GGP will need to
declare a dividend to its stockholders on or prior to December 21, 2009.4 To effect such a
process, the Debtors’ require authorization to declare and pay the Dividend in an expedited
manner. The Creditors’ Committee has advised the Debtors that it does not oppose the Debtors’
declaration and payment of the Dividend.
add'l lenders reach agreement with ggp:
http://www.kccllc.net/documents/0911977/0911977091208000000000002.pdf
revised por cash flow projections:
http://www.kccllc.net/documents/0911977/0911977091208000000000001.pdf
bidding war may not be in the cards:
simon entered deal to purchase prime outlets. utilizing $.7 billion of simon's assets and simon assuming remaining debt. this doesn't seem like an action simon would take if they were trying to preserve all of their capital for a run at ggp.
if in fact no bidding war comes to pass, that means that there will be little short-term volatility in ggp's stock arising over speculation of opposing parties duking it out. while some of last week's hugh runup might be given back in the short term, in the long term it appears ggp might be able to get through the reorg process without undue distractions. that will all be good for shareholders and i think the stock will continue its upward trend. mid-month hearing with the bk judge on the por will be key to continued smooth sailing.
http://finance.yahoo.com/news/Simon-Property-Group-to-prnews-2386471225.html/print?x=0
ggp and brookfield asset mgmt:
this news hit yesterday and may well move the stock up today. my read of this whole article (google it, it is reuters coverage) is that bam might assist ggp in ggp's efforts to get out of bk as opposed to attempting to take over or buy portions of gpp on a piecemeal basis.
i think i also mis-interpreted nolan's comments about emerging from bk by mid-2010. my initial take was that nolan was signaling that the por might not be filed by the end of february, which is the end of the exclusive period in which ggp may file a por without interference from others. while ggp can obtain another 9 month extension for exclusive ability to file its por, i now think they may actually file by the end of february 2010 and that it will take until mid-2010 to get court approval and do all of the things necessary to emege which might take 2-6 months from the time the por is filed in february.
Brookfield Says Meaningful Creditor In GGP
Posted: Tue., December 8, 2009
Brookfield Asset Management, a global property investor, said on Monday it is a meaningful creditor in bankrupt U.S. mall operator General Growth Properties and has held talks to assist it in its reorganization. Denis Couture, a spokesman for the Canadian asset manager, told Reuters on Monday that Brookfield has become a significant creditor of General Growth. But he would neither confirm nor deny a report last week that Brookfield had purchased close to $1 billion of General Growth's unsecured debt in recent months. Couture also said the Canadian asset manager believed the interests of stakeholders would be best served if General Growth emerged from bankruptcy protection as a stand-alone company, to pursue an objective of being a leading mall owner and operator.
additional por details:
http://www.kccllc.net/documents/0911977/0911977091204000000000012.pdf
interesting take from nolan:
his timeframe seems to be mid-year, NOT by end of feb.
http://baltimore.bizjournals.com/baltimore/stories/2009/11/30/daily38.html
additional properties added to por!!!
http://baltimore.bizjournals.com/baltimore/stories/2009/11/30/daily23.html?ana=yfcpc
limited access to plan:
5. The Plan Debtors are not required to provide either a copy of the Plan, the
Disclosure Statement, notice of the Voting Deadline, or any other documents to any parties other
than the Voting Parties; provided, however, the Plan Debtors shall distribute or cause to be
distributed via overnight delivery Solicitation Packages (excluding Ballot) to: (a) the Office of
the U.S. Trustee, (Attn: Greg M. Zipes and Linda Riffkin, Esqs.); (b) attorneys for the Creditors’
Committee, Akin Gump Strauss Hauer & Feld LLP, (Attn: Michael S. Stamer and James R.
Savin, Esqs.); (c) attorneys for the Equity Committee, Saul Ewing LLP (Attn: John J. Jerome and
Joyce A. Kuhns, Esqs.); and (d) attorneys for the debtor in possession lender, Gibson, Dunn &
Crutcher LLP, (Attn: David M. Feldman, Esq.).
hot off the press!! court order approving
http://www.kccllc.net/documents/0911977/0911977091201000000000010.pdf
simon was on cnbc:
well, simon did just do his interview on cnbc and he was asked about general growth. simon said that his company was in a position to partner with institutional money to make a bid for general growth and the way he spoke about it appeared that he was interested in bidding for the whole company.
he responded there might be one or two entities capable of entering a bidding war against simon for ggp. all of this presupposes that ggp wants to take a buyout. this is the bucksbaum's family business in which they still hold a 25% interest. combined with ackman's 25% control i just don't see ggp being sold unless these ackman and the bucksbaums want to cut and run.
while i do believe that the interest and an expected run by simon and possibly others at the company will drive up the price, i just think that will serve to get the stock back up to par quicker than it might otherwise have done without this interest.
when ggp emerges, the market should be significantly better than it was when they entered bk. that means asset values will be better. while that will not be reflected on ggp's balance sheet (because they carry their assets at cost, not market value), it will definitely show up in the pps. that means that ggp will be able to tap the equity market if/when they need to.
i do think this is a goose which will lay many golden eggs for ackman, the bucksbaums, and the shareholders but that won't happen for those of us who hold shares if that goose is sold.
the generational opportunity they are talking about is what we have in our hands now. if sold, that opportunity will belong to someone else.
i just think ackman will take the very long-term view of this company as will the bucksbaums and not sell.
any way it goes, the next couple of weeks and months will be volatile and interesting. hopefully israel won't bomb iran and that there will be no other earthshaking geopolitical bombshells.
zell: prime mall will do fine!
zell discussed commercial r/e this morning on cnbc. while he felt that the 80% of commercial r/e held by regional banks would be severly stressed he followed by stating that institutional r/e (like those held by ggp and simon, my words) would not be severely impacted. zell described the commercial r/e which would be severely impacted as sub-standard malls and strip centers. this is NOT what institutional real estate is. when zell spoke about dilution and wiping out equity holders, he was speaking about those who have invested in sub-standard malls and strip centers. like the kind we have all driven by lately which are empty, losing tenants, were never completed, or were never leased. remember, ggp's occupancy is in excess of 90%.
simon dropped from cnbc interview:
looks like simon not on today. maybe he had to decline because of the european deal that is in the works. who knows, but zell, trump, ross, and lafrack will be on later this morning.
por for agreed loan extensions to be filed today!
One element to a plan of reorganization is the resolution of currently past due or imminently maturing mortgage debt. In such regard, certain of the Debtors (with approximately $9.2 billion of secured debt outstanding (the “Track 1 Debtors”)) have reached agreements in principle for the extension of such secured debt encumbering the properties owned by the Track 1 Debtors. Accordingly, on November 23, 2009, the Track 1 Debtors filed a notice of presentment indicating that the Track 1 Debtors will file a motion on December 1, 2009 regarding their Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. In principle, the secured debt agreements generally provide for, upon payment of certain extension fees and cure of previously unpaid amounts due on the applicable mortgage debt (primarily, principal amortization otherwise scheduled to have been paid since the Petition Date), the extension of the secured mortgage debt for periods ranging from 3.5 to 5 years at the previously existing interest rates. Accordingly, except for certain of the secured debt which will have more rapid principal amortization payment schedules, debt service requirements for these properties will resume unchanged from those that existed prior to the commencement of the applicable Chapter 11 Cases for the Track 1 Debtors. In addition, as November 12, 2009 was established as the claims bar date for the presentation of claims against the Debtors for liabilities to be resolved in their reorganization plans, the Track I Debtors have commenced the reconciliation process with respect to their applicable claims. The Track 1 Debtors intend to pay in full all Bankruptcy Court allowed unsecured claims. Accordingly, the Track 1 Debtors are planning to finalize these secured debt extension agreements in conjunction with confirmation of individual reorganization plans for each Track 1 Debtor by the Bankruptcy Court. The confirmation hearing on such reorganization plans of the Track 1 Debtors has been scheduled for December 15, 2009, with the anticipation that the Track 1 Debtors can emerge from the Chapter 11 Cases by December 31, 2009. The Chapter 11 Cases for the remaining 212 Debtors (the “2010 Track Debtors”) will continue unchanged by the resolution of the Chapter 11 Cases applicable to the Track 1 Debtors.
ggp's most recent monthly financial's out:
http://www.sec.gov/Archives/edgar/data/895648/000095012309067003/c54884exv99w1.htm
simon buyout could face scrutiny
http://industry.bnet.com/retail/10005329/general-growth-a-good-fit-for-simon-but-deal-could-face-scrutiny/
david simon, sam zell, donald trump on squawk box tomorrow (tuesday) morning. don't know what segment but squawk goes from 6:00am to 9:00am. this is your change to email q's to the program hosts and have them ask about interest in general growth.
simon adding to warchest?
if for a run at ggp, i still think they are a day late and a dollar short.
http://www.reuters.com/article/marketsNews/idCNGEE5AT1OG20091130?rpc=44
key dates:
if you are not interested in reading the whole filing, the key dates are listed below. if you are into doing your own due diligence, then reading the complete file would be recommended.
November 27, 2009 Record Date
On or about November 30, 2009 Disclosure Statement and Plan filing
On or about December 2, 2009 Solicitation commences
On or about December 2, 2009 Overnight delivery of the Disclosure Statement and
Confirmation Hearing Notice, Non-Voting Status Notice,
and the General Disclosure Statement and Confirmation
Hearing Notice on all relevant parties
On or about December 4, 2009 Deadline to publish the Publication Notice in The Wall
Street Journal (National Edition)
December 11, 2009, at 5:00 p.m.
(prevailing Eastern Time)
Deadline to object to the Disclosure Statement and
confirmation of the Plan
December 11, 2009, at 5:00 p.m.
(prevailing Eastern Time)
Voting Deadline
December 14, 2009, at 12:00 p.m.
(prevailing Eastern Time)
Certification of votes
December 14, 2009, at 12:00 p.m.
(prevailing Eastern Time)
Confirmation brief and reply deadline
December 15, 2009, at 2:30 p.m.
(prevailing Eastern Time), or such
other time as is convenient for the
Court
Disclosure Statement and Confirmation Hearing
important upcoming dates:
scroll down to page 45 of 89 for a list of key dates in the plan of reorganization progress.
http://www.kccllc.net/documents/0911977/0911977091123000000000018.pdf
disclosure stmt for por out today or monday!
according to a court filing which received court approval, ggp plans to release on or about november 30, 2009 its disclosure statement for the debtor's joint plan of reorganization as well as the debtor's joint chapter 11 plan of reorganization.
ggp has received the court's approval to file certain potions of the por under seal. details are explained on the link below.
http://www.kccllc.net/documents/0911977/0911977091125000000000001.pdf
you're on the wrong board.
the summerlin matter (hughes heirs)
this is one of the matters which still has to be settled. about a year and a half ago, the liability was estimated to be over $1 billion. because of the collapse in real estate values in the las vegas area, that liablility is now estimated to be around $100 million. ggp had an obligation to pay off the liability in 2010 based on an appraised value at the end of 2009. this whole matter is part of the workout which is taking place now.
following are the notes from the annual report which expain this issue:
Contingent Stock Agreement
In conjunction with the TRC Merger, we assumed TRC’s obligations under a Contingent Stock Agreement (“CSA”). TRC entered into the CSA in 1996 when it acquired The Hughes Corporation (“Hughes”). This acquisition included various assets, including Summerlin (the “CSA Assets”), a development in our Master Planned Communities segment. We agreed that the TRC Merger would not have a prejudicial effect on the former Hughes owners or their successors (the “Beneficiaries”) with respect to their receipt of securities pursuant to the CSA. We further agreed to indemnify and hold harmless the Beneficiaries against losses arising out of any breach by us of these covenants.
Under the CSA, we are required to issue shares of our common stock semi-annually (February and August) to the Beneficiaries. The number of shares to be issued in any period is based on cash flows from the development and/or sale of the CSA Assets and our stock price. We account for the Beneficiaries’ share of earnings from the CSA Assets as an operating expense. In February 2009, we were not obligated to deliver any shares of our common stock under the CSA. We delivered 356,661 shares of our common stock (from treasury shares) to the Beneficiaries in 2008 and 698,601 shares (including 146,969 treasury shares) in 2007. For February 2009, we were not obligated to issue any of our common stock pursuant to this requirement as the net development and sales cash flows were negative for the applicable period.
Under the CSA, we are also required to make a final stock distribution to the Beneficiaries in 2010, following a final valuation at the end of 2009. The amount of this distribution will be based on the appraised values, as defined, of the CSA assets at such time and the distribution will be accounted for as additional investments in the related assets (that is, contingent consideration).
We expect that an appraisal, which would be based on the then current market or liquidation value of the CSA Assets, would yield a lower value than our current estimated value of such assets which is based on management’s financial models which project cash flows over a sales period extending to 2031 and a discount rate of 14%. Pursuant to the CSA and based on the current market price of our common stock, the final distribution would result in the Beneficiaries holding substantially all of our common stock. Such issuance of common stock would result in a change in control of the Company which would cause a default or an acceleration of the maturity date under certain of our debt obligations.
old shares swapped for new shares:
following is a link for how the mirant company effected its plan of reorganizaton. it shows the mechanism of emerging from bk and issuing new shares. please don't panic over the ratio of old shares to new shares. this was only applicable to mirant and all indications are that the ratio for general growth should be massivly better. my guess would be 3 new shares for each 5 old shares (at worst). remember, all secured creditors will have been taken care of through the process of loan extensions (no equity for them) and therefore, the equity split when general growth emerges will only be an issue between the shareholders and the unsecured creditors (assuming unsecured creditors will swap their debt for equity).
this is why valuation of the company will be important. the shareholder committee will want to value the company as aggressively as possible to reduce their dilution and the unsecured creditors will want to minimize the value of the company so they get an outsized piece of the pie. when the news release this past week said the committees for equity and unsecured creditors were meeting to resolve issues, this is what they are doing.
if the company is valued at a net $10 billion (in excess of secured debt) and unsecured creditors are to be made whole (assume no interest) then the unsecured creditors would get stock worth $6 billion and the current shareholders would get stock worth $4 billion. if the company is valued at $20 billion then the unsecured creditors would get $6 billion in stock and the existing sharesholders would get $14 billion worth. if the company is valued at less than $6 billion i don't know what happens. buy that i mean i do not know if the unsecureds get everything and the equity holders get nothing or if there is an allocation between unsecureds and equity holders.
while the above is a gross simplification you get the idea. make the numbers whatever you want them to be and spin whatever story you want but this is framework for how this will play out.
http://www.mirant.com/investor_relations/faqs.htm#8
no apparent interest rate upside.
after reading the various announcements regarding the new loan extensions and the blended interest rate in the 5% range, i had hoped the ggp might experience some additional positive cash flow from lower interest rates which could offset the new loan amortization requirements. however, reviewing the most recent quarterly report (see note 4), it appears there is not appreciable difference in the interest rates. that said, i think it is a good thing that there will be amortization of the loans because it will reduce outstanding debt which will make ggp's balance sheet stronger.
if lenders around the country are properly cautious, i believe that when reits other than ggp have to address loan rollovers or extensions that they may well require loan amortizations as well. that would be good for the industry as it would guarantee that all reits have increasing skin in the game on an individual mortgage by mortgage basis.
following is the note 4 information: it doesn't format well on a cut and paste so you're just going to have to muddle through the numbers. the text is ok if you want to just skip down to it.
NOTE 4 MORTGAGES, NOTES AND LOANS PAYABLE
Mortgages, notes and loans payable are summarized as follows:
September 30,
December 31,
2009
2008
(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable
$
15,860,334
$
15,538,825
Corporate and other unsecured term loans
3,719,931
3,701,615
Total fixed-rate debt
19,580,265
19,240,440
Variable-rate debt:
Collateralized mortgages, notes and loans payable
2,500,542
2,732,437
Corporate and other unsecured term loans
2,783,700
2,783,700
Total variable-rate debt
5,284,242
5,516,137
Total mortgages, notes and loans payable
$
24,864,507
$
24,756,577
As previously discussed, on April 16 and 22, 2009, the Debtors filed voluntary petitions for relief under Chapter 11, which triggered defaults on substantially all debt obligations of the Debtors. However, under section 362 of Chapter 11, the filing of a bankruptcy petition automatically stays most actions against the debtor’s estate. Absent an order of the Bankruptcy Court, these pre-petition liabilities are subject to settlement under a plan of reorganization, and therefore are presented as Liabilities subject to compromise on the Consolidated Balance Sheet. Of the total amount of debt presented above, $3.03 billion is not subject to compromise, consisting primarily of the collateralized mortgages of Non-Debtors and the DIP Facility as defined and described below.
The weighted-average interest rate including the effects of interest rate swaps, excluding the effects of deferred finance costs and using the contract rate prior to any defaults on such loans, on our mortgages, notes and loans payable was 5.32% at September 30, 2009 and 5.36% at December 31, 2008. The weighted average interest rate, using the contract rate prior to any defaults on such loans, on the remaining corporate unsecured fixed and variable rate debt and the revolving credit facility was 4.26% at September 30, 2009 and 4.29% at December 31, 2008. We are currently recognizing interest expense on our loans based on contract rates in effect prior to bankruptcy as the Bankruptcy Court has ruled that interest payments based on such contract rates constitutes adequate protection to the secured lenders.
ggp reaches loan agreement:
Press Releases
General Growth Properties Reaches Agreements in Principle on Certain Mortgage Related Debt
11/19/2009
David Keating
Senior Director of Corporate Communications
(312) 960-6325
CHICAGO, November 19, 2009 — GENERAL GROWTH PROPERTIES, INC. ("GGP") today announced it has reached agreements in principle to restructure approximately $8.9 billion of secured mortgage loans. Key provisions of the agreements include maturity date extensions resulting in an average loan duration of approximately 6.4 years from January 1, 2010, with no such loan maturing prior to January 2014, and continuation of interest at the current non-default rate. The weighted average contract interest rate for the 70 loans covered by these agreements is 5.35%. The all-in-interest rate after amortization of fees paid in connection with these loans is 5.54%.
"We are extremely pleased to reach this consensual agreement with lenders representing more than half of the mortgage debt covered by the bankruptcy proceedings," said Thomas H. Nolan, Jr., President and Chief Operating Officer of GGP. "We believe that these agreements provide a basis for consensually completing a restructuring of the debtors’ remaining approximately $6 billion of secured mortgage loans and we are hopeful that our other secured mortgage lenders will work with us to reach agreements quickly. We are working with the unsecured creditors committee, the equity committee and other constituents to resolve the restructuring of our corporate level debt and equity and believe that these agreements with our mortgage lenders represent an important step toward establishing a long term capital structure for GGP."
The agreements are subject to various conditions and approvals, including completion of definitive documentation and approval of the Bankruptcy Court in the Southern District of New York, where GGP and approximately 166 regional shopping centers and certain other GGP subsidiaries filed for Chapter 11 bankruptcy protection in April 2009. In addition, certain of the loan extensions remain subject to the approval of the Class B noteholders or mezzanine holders. GGP is currently engaged in discussions with these mortgage lenders regarding the definitive documentation and expects to file the plan of reorganization and related disclosure statement with the Bankruptcy Court expeditiously. GGP hopes to emerge the regional shopping centers associated with these mortgage loans from bankruptcy prior to the end of 2009.
ABOUT GGP
The Company currently has ownership interest in, or management responsibility for, over 200 regional shopping malls in 44 states, as well as ownership in planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company’s common stock is currently traded in the over-the-counter securities market operated by Pink OTC Markets Inc. using the symbol GGWPQ.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, the bankruptcy filings of the Debtors, our ability to refinance, extend or repay our near and intermediate term debt, our substantial level of indebtedness, changes in interest rates, retail and credit market conditions, impairments, land sales in the Master Planned Communities segment, the cost and success of development and re-development projects and our liquidity demands. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors that could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements
heavy lifting, part 3:
a review of the current application for payment by kirkland and ellis for the month of september indicates that over 60% of their billing was a result of work on the plan of reorganization. this work included:
revising loan documents and agreements;
draft a memorandum of law on the plan of reorganization issues;
preparing and compiling binders which contained loan summaries, term sheets, and various loan documents;
review and revision of potential lender presentation re: exit strategies;
reveiw and analyze cmbs prospectuses for each project-level term sheet; and,
drafing non-disclosure agreements for the various secured lenders.
it is very apparent that ggp is steamrolling this process so that they can exit bankruptcy soner rather than later.
regarding the speculation surrounding simon and others attempting to "buy out" ggp, i'm afraid they may be a day late and a dollar short.
the court has given ggp the exclusive right to submit a plan of reorganization and they have until the feb/mar 2010 timeframe to do so. therefore, regarding some reports that simon has contacted some of the ggp lenders, i think they should be careful. if ggp thinks for a moment that simon, or anyone else for that matter, it attempting to interfere with ggp's negotiations with its lenders, i don't believe for a moment that ggp would hesitate to march in to judge gropper and get any recalcitrant lenders back in line.
gropper made it abundantly clear that he expected the lenders and ggp to negotiate extensions and get ggp out of bk. simon has no status at this time to interfere with this process. that doesn't mean that simon can not express an interest in acquiring all or part of ggp, but that would only be after ggp emerged, in my opinion.
what the simon news has served to do is give credence to the fact that ggp WILL emerge from bk and that the assets will be intact, along with the shareholders. it is apparent from looking at the legal and consulting invoices that the process is close to coming to fruition. maybe the speculation that an agreement could be reached by next week is not too far off. i really think the best simon, or anyone else, can do is offer a per share price with an agreement that they will assume all of the debts (with the extensions negotiated during this bk process) and just step in in place of ggp.
that would be a sweet deal if they could get it but i just don't think the bucksbaums and ackman will agree with that. why should they? if the debt is extended for 3-5-7-9 years, ggp would be in the catbird seat. no loans coming due, positive cash flow, and a good long time to get the balance sheet healed by paydown of debt or selected sale of properties which won't have to be at a firesale.
i had previously posted that i thought the stock could reach as high as $8 before the por was announced. if there is continued fire fanning by the likes of simon then the pre-emergence price could hit dbl digits.
the stock flew today on speculation, imagine what will happen if/when the loan renegotiations are announced.
on the cautionary side, remember that ggp is apparently requiring the secured lenders to sign non-disclosure agreements so we may not get any timely news on loan extension agreements until much closer to the time the por is to be announced. all said and done, this stock should continue trending up while being subject to more volatility than other reits because of the bk status.
if you are long, you gotta love it though.
simon posts quarterly results:
Results Overview
Diluted earnings per unit decreased $0.50 during the first nine months of 2009, or 40.7%, to $0.73 from $1.23 for the same period last year. The decrease in diluted earnings per unit was attributable to a $140.5 million, or $0.45 per unit, other-than-temporary impairment charge related to our investment in Liberty International, PLC, or Liberty, a U.K. REIT. We recorded the other-than-temporary charge in the second quarter of 2009 due to the significance and duration of the decline in quoted fair value, including related currency exchange component, below the carrying value of the securities. During the nine months ended September 30, 2008, we recorded a $20.3 million loss on extinguishment of debt related to our redemption of the 7% MandatOry Par Put Remarketed Securities, or MOPPRS. For the three and nine month periods, we also had additional dilution to earnings per unit from Simon Property's 2009 equity offerings of approximately $0.06 and $0.12 per unit, respectively.
Core business fundamentals were affected by the difficult economic environment during the first nine months of 2009. Regional mall comparable sales per square foot, or psf, declined 11.2% during the first nine months of 2009 to $438 psf from $493 psf for the same period in 2008. However, our regional mall average base rents increased 2.0% to $40.05 psf as of September 30, 2009, from $39.26 psf as of September 30, 2008 due to releasing of space at higher rents. We were able to lease available square feet at higher rents than the expiring rental rates in the regional mall portfolio resulting in a leasing spread of $4.04 psf as of September 30, 2009, representing a 10.6% increase over expiring rents. Regional mall occupancy was 91.4% as of September 30, 2009, as compared to 92.5% as of September 30, 2008 driven by higher bankruptcies and lease terminations. The more stable operating fundamentals of the Premium Outlet centers contributed to the positive operating results for the nine month period as occupancy of the portfolio remained high at 97.5% while comparable sales psf decreased 4.5% to $492 as consumers continued to prefer retail value, offset by the impact of the economic downturn. Premium Outlet leasing spreads were $9.25, or 32.0% above expiring rents.
As of September 30, 2009, our effective overall borrowing rate decreased two basis points to 5.62% as compared to September 30, 2008. This is a result of a significant decrease in the base LIBOR rate applicable to a majority of our floating rate debt (0.25% at September 30, 2009, versus 3.93% at September 30, 2008). This decrease was partially offset by an increase of our fixed rate debt of $1.4 billion ($16.9 billion at September 30, 2009 versus $15.4 billion at September 30, 2008), which increased the
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Table of Contents
weighted average rate 34 basis points as compared to September 30, 2008. Financing activities for the nine months ended September 30, 2009 included:
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decreasing borrowings on our $3.5 billion unsecured credit facility, or Credit Facility, to approximately $456.2 million as of September 30, 2009. The ending balance is entirely comprised of the U.S. dollar equivalent of Euro and Yen-denominated borrowings.
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issuing $650.0 million in 10.35% senior unsecured notes due 2019. We used the proceeds of the offering to reduce borrowings on the Credit Facility.
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issuing $1.1 billion in 6.75% senior unsecured notes due 2014. We used the proceeds of the offering for general corporate purposes.
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redeeming five series of maturing unsecured notes totaling $900.0 million which had fixed rates ranging from 3.50% to 8.63%.
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borrowing $400.0 million on a loan which matures on August 1, 2016 and bears interest at a fixed rate of 8.00%. This loan is secured by cross-collateralized, cross-defaulted mortgages on Greenwood Park Mall, South Park Mall, and Walt Whitman Mall.
ggwpq 2009 stock dividend:
NOTE 5 INCOME TAXES
We elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code, commencing with our taxable year beginning January 1, 1993. We currently intend to maintain our REIT status. To qualify as a REIT, we must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of our ordinary taxable income and to either distribute capital gains to stockholders, or pay corporate income tax on the undistributed capital gains. In addition, we are required to meet certain asset and income tests. We may still satisfy our REIT taxable income distribution requirement for 2009 by declaring a distribution prior to September 15, 2010 and making a payment before December 31, 2010, although satisfaction of this 2009 requirement in 2010 would subject us to a 4% nondeductible federal excise tax under IRC Section 4981. Since we currently do not expect to meet our 2009 income distribution declaration and payment requirements without becoming subject to this excise tax, we have recorded a provision of approximately $0.3 million at September 30, 2009 for such excise tax.
We also have subsidiaries which we have elected to be treated as taxable real estate investment trust subsidiaries and which are therefore subject to federal and state income taxes.
Unrecognized tax benefits recorded pursuant to uncertain tax positions were $99.9 million and $112.9 million as of September 30, 2009 and December 31, 2008, respectively, excluding interest, of which $33.5 million as of September 30, 2009 and $36.7 million as of December 31, 2008 would impact our effective tax rate. Accrued interest related to these unrecognized tax benefits amounted to $20.8 million as of September 30, 2009 and $21.7 million as of December 31, 2008. We recognized a reduction of interest expense related to the unrecognized tax benefits of $3.9 million for the three months ended September 30, 2009, $0.9 for the nine months ended September 30, 2009; and we recognize interest expense related to the unrecognized tax benefits of $2.7 million for the three months ended September 30, 2008 and $7.5 million for the nine months ended September 30, 2008.
During the nine months ended September 30, 2009, we recognized previously unrecognized tax benefits related to tax positions taken in prior years, excluding accrued interest, of $13.0 million; all of which decreased our deferred tax liability.
Generally, we are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2005 through 2008 and are open to audit by state taxing authorities for years ending December 31, 2004 through 2008. In February 2009, we were notified that the IRS has commenced examination of the year ended December 31, 2007 with respect to two of our taxable REIT subsidiaries. We received a letter of Income Tax Examination Changes (“30 Day Letter”) for the two taxable REIT subsidiaries under examination from the IRS. The proposed changes amount to additional tax of $128.1 million. We timely filed a protest disputing the proposed changes. It is the Company’s position that the pertinent tax law at
Contingent Stock Agreement
In conjunction with the TRC Merger, we assumed TRC’s obligations under a Contingent Stock Agreement (“CSA”). TRC entered into the CSA in 1996 when it acquired The Hughes Corporation (“Hughes”). This acquisition included various assets, including Summerlin (the “CSA Assets”), a development in our Master Planned Communities segment. The CSA is an unsecured obligation of a Debtor and therefore, our obligations to the former Hughes owners or their successors (the “Beneficiaries”) under the CSA are, and will be, subject to treatment in accordance with applicable requirements of the bankruptcy law and any plan of reorganization (see Note 1) that may be confirmed by the Bankruptcy Court.
Under the terms of the CSA, we are required to issue shares of our common stock semi-annually (February and August) to the Beneficiaries with the number of shares to be issued in any period based on cash flows from the development and/or sale of the CSA Assets and our stock price. We account for the Beneficiaries’ share of earnings from the CSA Assets as an operating expense. During 2009, we were not obligated to deliver any shares of our common stock under the CSA as the net development and sales cash flows were negative for the applicable periods. We delivered 356,661 shares of our common stock (from treasury shares) to the Beneficiaries for the nine months ended September 30, 2008. Under the terms of the CSA, we are also required to make a final stock distribution to the Beneficiaries in 2010. However, as our plan of reorganization is still being developed, the form and the ultimate distribution amount, if any, to the Beneficiaries cannot currently be determined.
sec link to ggwpq Q3 results:
http://www.sec.gov/Archives/edgar/data/895648/000095012309058692/c54330exv99w1.htm
macerich posts nice Q3 results: looks like things starting to turn around.
MACERICH ANNOUNCES THIRD QUARTER RESULTS
Santa Monica, CA (11/05/09)—The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended September 30, 2009 which included total funds from operations ("FFO") diluted of $88.7 million or $.97 per share-diluted, compared to $1.12 per share-diluted for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, FFO-diluted was $251.4 million, or $2.80 per share-diluted compared to $290.7 million or $3.29 per share-diluted for the nine months ended September 30, 2008. Net income available to common stockholders for the quarter ended September 30, 2009 was $142.8 million or $1.75 per share-diluted compared to $2.6 million or $.03 per share-diluted for the quarter ended September 30, 2008. Included in net income for the quarter was $161.6 million of gain on sale of assets which primarily resulted from the sale of a joint venture interest in Queens Center. For the nine months ended September 30, 2009, net income available to common stockholders was $135.1 million or $1.71 per share-diluted compared to $110.9 million or $1.50 per share-diluted for the nine months ended September 30, 2008. The Company's definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts ("NAREIT"). A reconciliation of net income to FFO and net income per common share-diluted ("EPS") to FFO per share-diluted is included in the financial tables accompanying this press release.
Recent Activity:
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During the quarter, Macerich signed 294,000 square feet of specialty store leases with average initial rents of $40.98 per square foot. Starting base rent on new lease signings was 14.2% higher than the expiring base rent.
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The Company completed three joint venture transactions generating over $434 million of cash proceeds.
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Portfolio occupancy at September 30, 2009 was 91.0% compared to 90.5% at June 30, 2009 and 92.8% at September 30, 2008.
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On October 27, 2009, the Company closed a common stock offering of 13.8 million shares that raised net proceeds of $383 million.
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Tenant sales per square foot were $418 for the twelve month period ended September 30, 2009 compared to sales per square foot of $441 for the year ended December 31, 2008.
Commenting on the quarter, Arthur Coppola chairman and chief executive officer of Macerich stated, "We had a significant amount of capital activity during the quarter having completed three joint ventures that netted over $434 million in cash proceeds. We systematically continued our efforts to de-leverage our balance sheet with the recently completed common equity offering. Our liquidity and debt reduction plan has also included selling non core assets and issuing stock dividends. Year to date we have generated over $1 billion in cash that has been applied towards our de-leveraging goals."
keep the faith:
http://seekingalpha.com/article/170812-banks-run-out-of-options-in-general-growth-properties
investment grade real estate increased 4.4% in value in Q3. first such increase in two years. flickers of light at the end of the tunnel.