General Growth Properties, Inc. (NYSE:GGP) announced today
additional disclosure of its financing and capital plans in order
to provide investors and the financial community a better basis for
evaluating the Company�s ability to refinance upcoming maturing
debt. �Lender interest in our mall properties continues to be
active, and we have many sources for capital to refinance our
upcoming obligations,� said Bernie Freibaum, GGP CFO. As of the end
of 2007, GGP had $2.621 billion of company portfolio debt maturing
in 2008 and $3.344 billion of company portfolio debt maturing in
2009. Of this, $359 million of 2008-2009 maturing debt has already
been refinanced. The debt maturing in 2008 includes $1.816 billion
of mortgage and other secured debt, $722 million of remaining
bridge acquisition debt, and $83 million of notes. The Company
estimates that property-level income, a measure used by lenders for
financing purposes, will be approximately $365 million in the
twelve months following the maturity date of the debt maturing in
2008. Using an average capitalization rate of 7.5% to determine
loan capacity, the properties would have a value for financing
purposes of $4.867 billion. Accordingly, the maturing 2008 mortgage
debt of $1.816 billion represents approximately 37.3% of the
financing value of the properties. The debt maturing in 2009
includes $2.744 billion of mortgage and other secured debt and $600
million of notes. The Company estimates that property-level income
will be approximately $415 million in the twelve months following
the maturity date of the debt maturing in 2009. Using an average
capitalization rate of 7.5% to determine loan capacity, the
properties would have a value for financing purposes of $5.533
billion. Accordingly, the maturing 2009 mortgage debt of $2.744
billion represents approximately 49.6% of the financing value of
the properties. We are currently negotiating the terms of the
agreements to refinance debt maturing in 2008. The terms of these
new long term fixed rate mortgage loans include expected loan
amounts equal to approximately 50%-60% of property value for
financing purposes, capitalization rates well below 7.5%, and
interest rates of approximately 5.75%. As a result, although
agreements to refinance debt maturing in 2008 and 2009 have not
been reached, we currently believe that over the next two years the
Company will generate significant excess proceeds from the
refinancing of the $4.56 billion of maturing mortgage debt. The
Company also owns unencumbered income producing and development in
progress properties that the Company believes have a value for
financing purposes of at least $2.5 billion. In addition, the
Company has maintained since 2004 that the Company would sell
certain office assets upon expiration of tax-related restrictions
in 2008, and the Company is currently offering for sale a number of
suburban office buildings. Further, the Master Planned Community
land is substantially unencumbered. Future development
expenditures, including expenditures for projects under
consideration, are currently expected to total approximately $1.3
billion in 2008 and $1.0 billion in 2009. Those expenditures could
be reduced, however, as conditions may warrant. To summarize, the
Company believes that excess proceeds from refinancing maturing
mortgages, new financing on currently unencumbered operating
assets, new construction loans on future development projects,
proceeds from the sale of office buildings and cash from operations
will, in the aggregate, be more than sufficient to meet the
Company�s cash needs in 2008 and 2009. �We remain confident that we
will have sufficient capital to pursue our expansion plans, which
primarily focus on redeveloping existing properties, but also
include a few ground up developments. As we execute these plans, we
will continue to weigh these decisions carefully and to operate in
the best interests of our stockholders,� said John Bucksbaum,
Chairman and CEO of GGP. The amounts included in this press release
for debt maturing in 2008 and 2009 have not been calculated in
accordance with generally accepted accounting principles (GAAP). If
such amounts were reconciled to GAAP, the Company believes the
reconciling items would be quantitatively and qualitatively
immaterial and that such debt amounts disclosed approximate the
GAAP amounts. GGP is one of the largest U.S.-based publicly traded
Real Estate Investment Trusts (REIT) based upon market
capitalization. The Company currently has ownership interest in, or
management responsibility for, a portfolio of more than 200
regional shopping malls in 45 states, as well as ownership in
master planned community developments and commercial office
buildings. The Company�s portfolio totals approximately 200 million
square feet and includes over 24,000 retail stores nationwide. The
Company is listed on the New York Stock Exchange under the symbol
GGP. For more information, please visit the Company website at
http://www.ggp.com. This press release contains forward-looking
statements, including information regarding our expected liquidity
and future financing transactions that have not yet closed. 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 retail market, tenant occupancy and tenant
bankruptcies, the level of indebtedness and interest rates, market
conditions, land sales in the Master Planned Communities segment,
the cost and success of development and re-development projects and
our ability to successfully manage growth. Readers are referred to
the documents filed by General Growth Properties, Inc. with the
SEC, specifically the most recent report on Form 10-K, which
further identify the important risk factors which 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. GENERAL GROWTH PROPERTIES,
INC.DEBT MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARYAS OF
DECEMBER 31, 2007(dollars in thousands) � � � � � � � � �
ConsolidatedProperties UnconsolidatedProperties (a)
CompanyPortfolio � Year MaturingAmount (b)
CurrentAverageInterestRate (c) MaturingAmount (b)
CurrentAverageInterestRate (c) MaturingAmount (b)
CurrentAverageInterestRate (c) � 2008 $ 2,417,017 5.43% $ 204,287
6.89% $ 2,621,304 5.55% 2009 3,098,368 5.40% 246,007 7.11%
3,344,375 5.53% 2010 3,914,306 5.18% 633,364 5.23% 4,547,670 5.19%
2011 7,138,295 6.28% 1,075,580 6.01% 8,213,875 6.24% 2012 3,857,169
5.17% 777,005 5.50% 4,634,174 5.23% 2013 2,593,489 6.02% 48,466
5.27% 2,641,955 6.01% 2014 255,601 5.11% 3,934 11.81% 259,535 5.21%
2015 195,787 5.21% 599 11.36% 196,386 5.23% 2016 229,017 6.61% -
0.00% 229,017 6.61% 2017 104,708 7.19% 47,313 6.24% 152,021 6.89%
Subsequent � 273,436 6.86% � 11,303 7.99% � 284,739 6.91% Totals $
24,077,193 5.69% $ 3,047,858 5.87% $ 27,125,051 5.71% � Fixed Rate
(e) 20,829,736 5.52% 2,750,680 5.67% 23,580,416 5.54% Variable Rate
(e) � 3,247,457 6.76% � 297,178 7.73% � 3,544,635 6.84% � Totals $
24,077,193 (d) 5.69% (f) $ 3,047,858 5.87% (f) $ 27,125,051 5.71%
(f) � � � Average Years to Maturity � � � � � � � � � � Fixed Rate
Debt 3.90 years 3.93 years 3.90 years � � � � � � � � � � �
Variable Rate Debt 5.05 years 3.22 years 4.90 years � � � � � � � �
� � � All GGP Debt 4.05 years 3.86 years 4.03 years � (a) Reflects
the Company's share of debt relating to the properties owned by the
Unconsolidated Real Estate Affiliates. (b) Excludes principal
amortization. (c) Reflects the current variable contract rate as of
December 31, 2007 for all variable rate loans. (d)�Total debt has
not been reconciled to GAAP as reconciling items would be
quantitatively and qualitatively immaterial and such debt amounts
disclosed approximate GAAP amounts. (e) Includes the effects of
interest rate swaps. (f) Rates include the effects of deferred
finance costs and the effect of a 360 day rate applied over a 365
day period. General Growth Properties, Inc.Fourth Quarter 2007
Financing Activity(dollars in thousands) � � � Fixed Rate Floating
Rate Total Debt � September 30, 2007 Debt(g) $ 23,544,587 $
3,347,058 $ 26,891,645 � New Funding: Property Related 55,000 -
55,000 Non-Property Related - - - � Refinancings: Property Related
243,197 (213,773 ) 29,424 Non-Property Related - - - � Interest
rate SWAP activity (200,000 ) 200,000 - � Revolver Borrowings -
211,350 211,350 Other Property Related (62,368 ) - (62,368 ) � � �
� � Net Change � 35,829 � � � 197,577 � � � 233,406 � � � � � �
December 31, 2007 Debt(g) $ 23,580,416 � � $ 3,544,635 � � $
27,125,051 � � � (g)�Includes Company's share of debt of
Unconsolidated Real Estate Affiliates.
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