CBL & Associates, the operator of Hamilton Place and Northgate malls in Chattanooga, has received two more weeks to work out a deal regarding the repayment of some of its debt.
The Chattanooga-based shopping center company said in a Securities and Exchange Commission filing Wednesday that it's continuing to engage in negotiations and discussions with the holders and lenders of its indebtedness.
"There can be no assurance, however, that the company will be able to negotiate acceptable terms or to reach any agreement with respect to its indebtedness," CBL added.
CBL's stock closed Wednesday at 26.9 cents per share, down 0.0027 cents, or 0.99%, on the New York Stock Exchange.
The company, with a portfolio of 108 properties in 26 states, has been challenged by the economic fallout from the coronavirus as well as online shopping and the closing of longtime retailers.
In the filing, CBL said it has entered into forbearance agreements on its credit agreement and with holders of more than 50% of its operating partnership's 5.25% senior unsecured notes due 2023.
The deal involves nonpayment of the $11.8 million interest payment that was due and payable on June 1. The company had a 30-day grace period that ended Tuesday.
The forbearance agreements announced Wednesday end on July 15 or when certain termination events occur, according to documents.
Jim Campbell, chief investment officer and managing partner of Campbell Rooks Wealth Management in Chattanooga, said that such forbearance agreements are not typical historically.
"It's a sign of the times," he said, adding that what's uncommon is how many companies are in forbearance.
Campbell said he didn't know if two weeks gives CBL enough time to work out a plan with lenders.
"I hope it's enough time," he said.
Stacey Keating, CBL's senior director of public relations and corporate communications, said company officers are "pleased to enter into forbearance agreements with our lenders, providing time to continue our discussions towards a positive resolution."
CBL employs about 250 people in Chattanooga and some 450 across the company.
In an earlier SEC filing, the company cited the effect the pandemic had on "retail and broader markets, the ongoing weakness of the credit markets and significant uncertainties associated with each of these matters."
CBL said in June there was "substantial doubt" it would continue to operate as a going concern.
CBL, like other mall companies, has been trying to redevelop its centers into what it called suburban town centers as the 42-year-old business faced consumer change in the marketplace.
But amid lockdowns due to the coronavirus, CBL reported it received just 27% of billed cash rents for April and its May collection rate likely will be in the 25% to 30% range amid closings during the pandemic.
Last month, the company posted a first quarter net loss of $133.9 million, compared to a net loss of $50.2 million a year ago.
Rating agency Fitch Ratings said that cash flow pressures on U.S. mall real estate investment trusts such as CBL are amplified by the lower near-term rent collections and lasting impacts on tenant businesses due to the pandemic.
"Property-level fundamentals will remain under stress due to accelerating store closures and bankruptcies of apparel and department store retailers, many of which were struggling prior the pandemic," Fitch said.
Also, consumers are expected to remain wary of visiting enclosed retail establishments as lockdowns are lifted, challenging the reopening of tenants within mall REIT portfolios, it said.
CBL had $3.8 billion of debt at the quarter ended March, according to Fitch.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.