CBL Properties Enters Into Restructuring Support Agreement With Noteholders to Significantly Strengthen Its Capital Structure
August 19 2020 - 8:20AM
Business Wire
Approximately $900 million of Debt and at Least
$600 Million of Other Obligations to be Eliminated and Maturity
Schedule Significantly Lengthened Highly Experienced and Dedicated
Leadership Team to Continue to Lead CBL
CBL Properties (NYSE:CBL) today announced that the Company has
entered into a Restructuring Support Agreement (the “RSA”) with
certain beneficial owners and/or investment advisors or managers of
discretionary funds, accounts, or other entities (the
“noteholders”) representing in excess of 57% of the aggregate
principal amount of the Operating Partnership’s 5.25% senior
unsecured notes due 2023 (the “2023 Notes”), the Operating
Partnership’s 4.60% senior unsecured notes due 2024 (the “2024
Notes”) and the Operating Partnership’s 5.95% senior unsecured
notes due 2026 (the “2026 Notes” and together with the 2023 Notes
and the 2024 Notes, the “Unsecured Notes”).
The terms of the RSA provide for a comprehensive restructuring
of the Company’s balance sheet (the “Plan”) through an in-court
process contemplated to commence no later than October 1, 2020. The
Company intends to continue collaborative negotiations with its
senior, secured lenders in the meantime to attempt to reach a
consensual arrangement with those lenders. In the event that such
an arrangement were reached, the Company would amend the RSA to
include its senior secured lenders. The agreement may be amended by
the Company and with the consent of noteholders representing at
least 75% of the Unsecured Notes that are held by noteholders that
are party to the RSA.
The Plan would eliminate the approximately $1.4 billion
principal amount of Unsecured Notes in exchange for the issuance of
$500 million of new senior secured notes due June 2028,
approximately $50 million of cash and approximately 90% of the new
common equity of the Company to holders of the Unsecured Notes. As
a result, the Plan, if implemented, will result in the elimination
of approximately $900 million of debt, extension of the Company’s
debt maturity schedule and a reduction in annual interest expense
of more than $20 million. The Plan also contemplates eliminating
the Company’s more than $600 million obligation on its preferred
stock in exchange for new common equity and warrants. In sum, the
Plan will provide the Company with a significantly stronger balance
sheet by reducing total debt, extending debt maturities and
increasing liquidity while minimizing operational disruptions.
Through this process, all day-to-day operations and business of
the Company’s wholly owned, joint venture and third-party managed
shopping centers will continue as normal. CBL’s customers, tenants
and partners can expect business as usual at all of CBL’s owned and
managed properties.
“Reaching this agreement with our noteholders is a major
milestone for CBL,” said Stephen D. Lebovitz, Chief Executive
Officer of CBL. “The agreement will significantly improve our
balance sheet by reducing leverage and increasing net cash flow and
will simplify our capital structure, providing enhanced financial
flexibility going forward.
“We also appreciate the confidence in the CBL organization and
leadership team shown by the noteholders as we’ve worked
collaboratively to find a solution that benefits all company
stakeholders. Our goal is for this process to proceed as smoothly
and as quickly as possible with no disruption to CBL’s operations.
Once the process is complete, we will emerge as a stronger and more
stable company, with an enhanced ability to execute on our key
strategies of diversifying our sources of revenue and transforming
our properties from traditional enclosed malls to suburban town
centers. As a result, we will be better positioned to grow our
business over the near and long term.”
CBL currently has approximately $220 million in cash on hand and
available for sale securities. The Company’s cash position,
combined with positive cash flow generated by ongoing operations,
is expected to be sufficient to meet CBL’s operational and
restructuring needs.
Certain subsidiaries, including CBL’s joint ventures and CBL’s
special purpose entities holding properties that secure mortgage
loans, are not contemplated to be included as part of the in-court
process. CBL anticipates continuing to meet all debt service and
other obligations, as required, under its property level secured
loans and joint venture partnerships.
The latest information on CBL’s restructuring, including news
and frequently asked questions, can be found at
cblproperties.com/restructuring.
No Solicitation or Offer
Any new securities to be issued pursuant to the restructuring
transactions may not be registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities
laws but may be issued pursuant to an exemption from such
registration provided in the U.S. bankruptcy code. Such new
securities may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and any applicable state
securities laws. This press release does not constitute an offer to
sell or buy, nor the solicitation of an offer to sell or buy, any
securities referred to herein, nor is this press release a
solicitation of consents to or votes to accept any chapter 11 plan.
Any solicitation or offer will only be made pursuant to a
confidential offering memorandum and disclosure statement and only
to such persons and in such jurisdictions as is permitted under
applicable law.
About CBL Properties
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of market-dominant properties located
in dynamic and growing communities. CBL’s portfolio is comprised of
108 properties totaling 68.2 million square feet across 26 states,
including 68 high‑quality enclosed, outlet and open-air retail
centers and 9 properties managed for third parties. CBL seeks to
continuously strengthen its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information, visit cblproperties.com.
Information included herein contains “forward-looking
statements” within the meaning of the federal securities laws. Such
statements are inherently subject to risks and uncertainties, many
of which cannot be predicted with accuracy and some of which might
not even be anticipated. Future events and actual events, financial
and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. The reader is directed
to the Company’s various filings with the Securities and Exchange
Commission, including without limitation the Company’s Annual
Report on Form 10-K and the “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” included therein,
for a discussion of such risks and uncertainties.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200819005368/en/
Investor Contact: Katie Reinsmidt, Executive Vice President
& Chief Investment Officer, 423.490.8301,
Katie.Reinsmidt@cblproperties.com Media Contact: Stacey Keating,
Senior Director – Public Relations & Corporate Communications,
423.490.8361, Stacey.Keating@cblproperties.com
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