CBL Properties, one of the nation’s largest owners of enclosed malls in secondary markets, will file for Chapter 11 bankruptcy protection in concert with a pre-made restructuring agreement with its lenders that will keep all of its 108 properties open and operating.
The Chattanooga, Tenn.-based company entered into a “restructuring support agreement,” or RSA, with certain owners and investment advisors or managers of discretionary funds that will allow a comprehensive restructuring of its balance sheet through an in-court process that will commence prior to Oct. 1.
The RSA will eliminate $900 million of CBL’s debt and $600 million of other financial obligations. In the meantime, CBL will attempt to amend the RSA to include its senior secured lenders, the addition of which would cover 75% of its unsecured notes.
“Reaching this agreement with our noteholders is a major milestone for CBL,” said the company’s CEO Stephen Lebovitz. “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.”
As a result of the RSA, all day-to-day operations of the company’s shopping centers will "continue as normal," according to a statement from CBL.
“Tenants and partners can expect business as usual at all of CBL’s owned and managed properties,” the company said.
Bloomberg had reported on July 20 that CBL was preparing to file for Chapter 11 protection. CBL remained quiet about its intentions until announcing the restructuring agreement today.