General Growth Properties Inc. (GGP)

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Table of the Notes

Per March 23 PR

 
                            Consent              Calculated 
      Interest   - - - - - - - - - - - - - -    Approx Total     Annual 
 Due     %       Accepted  % Needed  % Have         Notes        Interest 
   
 2009  3.625  $ 165,801,000   90    42.0       $ 394,764,286  $ 14,310,205 
 2009  8.000    134,784,000   90    67.4         199,976,261    15,998,101 
 2012  7.200    340,058,000   75    85.0 OK      400,068,235    28,804,913 
 2013  5.373    310,930,000   75    69.1 Close   449,971,056    24,176,945 
 2013  6.750    625,410,000   75    79.5 OK      786,679,245    53,100,849 
              - - - - - - -                     - - - - - - -  - - - - - - - 
              1,576,983,000                     2,231,459,084   136,391,013 
              = = = = = = =                     = = = = = = =   = = = = = =  
   
 Per Cent of Total:   70.67%                      Blended Interest %: 6.11% 
   
 OFFER 
 - - - -  
 62.5 cents per $1,000 per quarter = .0625% = .000625 
 Annualized = .0625% x 4 = .25% (1/4 of 1 percent) = .0025 
   
 Total to pay annually = $2,231,459,084 x .0025 = $5,578,648 
 

FWIW, a few thoughts from a non-expert:

1. It looks like the company could have trouble getting the 2009 holders to agree. Especially if they don’t give them a better deal than is being offered to the 2012 and 2013 issues.

2. I understand that the company cannot redeem the 2009 notes now, but I am not 100% clear on why they can’t pay the interest on all these notes. According to Ackman in the Bloomberg interview, GGP has 1.5+ debt service coverage. Presumably that was prior to last fall, and it has lessened since then, but 1) that is not what he said, and 2) so they can’t pay any interest at all on these notes???

3. Putting 1 and 2 together, I think they may have room to offer the 2009 holders something better, and I would think it would not have to be matched for the other issues because the 2009 holders are giving up more (i.e., the right to be repaid now.) If I held one of the 2009 issues, I don’t think I would happy with this offer.