Chattanooga mall owner CBL extends time to secure debt deal

Staff photo by Mike Pare / About 80% of the retailers at Hamilton Place mall have reopened after closing during the coronavirus outbreak, according to mall operator CBL Properties.
Staff photo by Mike Pare / About 80% of the retailers at Hamilton Place mall have reopened after closing during the coronavirus outbreak, according to mall operator CBL Properties.

CBL & Associates, the operator of Hamilton Place and Northgate malls in Chattanooga, has extended the time to secure an agreement related to the repayment of some of its debt.

The new forbearance period extends until July 22 the deadline for any of the specified termination events, the shopping center company said in a new filing with the Securities and Exchange Commission on Thursday.

"The company is continuing to engage in negotiations and discussions with the holders and lenders of the company's indebtedness," CBL said in a statement. "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 shares closed Thursday at 27.54 cents, up 0.139, or 5.32% on the New York Stock Exchange.

Two weeks ago, the company entered into a similar agreement over some of its debt. The company is in talks with its lenders amid a sharp downturn in revenues caused by the coronavirus outbreak.

CBL entered into a forbearance agreement related to its 5.95% senior unsecured notes due 2026. The holders of the 2026 notes have agreed to forbear from exercising any rights and remedies with respect to the default resulting from the nonpayment of the $18.6 million interest payment that was due and payable on June 15.

Also previously, CBL entered into a forbearance agreement related to 5.25% senior unsecured notes due 2023. Holders of the 2023 notes agreed to forbear from exercising any rights and remedies resulting from the nonpayment of the $11.8 million interest payment that was due and payable on June 1.

In addition, the company amended a prior forbearance agreement with respect to a credit agreement with Wells Fargo Bank, National Association, related to a credit agreement dated Jan. 30, 2019.

CBL has a portfolio of 108 properties in 26 states.

On Wednesday, Moody's said the rapid spread of the coronavirus outbreak, government measures put in place to contain it and the deteriorating global economic outlook have created "a severe and extensive credit shock across sectors, regions and markets."

"Stress on commercial real estate properties will be most directly stemming from declines in hotel occupancies (particularly related to conference or other group attendance) and declines in foot traffic and sales for non-essential items at retail properties," the rating agency said.

In June, CBL said there was "substantial doubt" it will continue to operate as a going concern within about a year.

In an 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."

In May, the company posted a first quarter net loss of $133.9 million, compared to a net loss of $50.2 million a year ago.

Also in May, 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 outbreak.

"The majority of our tenants requested rent relief, either in the form of rent deferrals or abatements," said Stephen Lebovitz, the company's chief executive. "We have placed a number of tenants in default for non-payment of rent."

Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.

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