CBL Properties announced that it has entered into a term sheet for a new $65 million non-recourse loan. CBL also announced a partial redemption of outstanding 10 percent Senior Secured Notes utilizing its share of net proceeds from the new financing and available cash.
“This new loan and subsequent partial redemption of the 10 percent notes will meaningfully strengthen our balance sheet, reduce our cost of capital, and enhance net cash flow,” said Stephen Lebovitz, chief executive officer, CBL Properties.
“We look forward to making additional similar announcements in the near future as we near our goal of refinancing all outstanding 10% Notes.”
Today, the company’s wholly owned subsidiary, CBL & Associates Holdco II, LLC delivered a conditional notice of redemption to holders of its 10 percent Senior Secured Notes due 2029, pursuant to the terms of the indenture governing the 10 percent notes, to redeem $60 million aggregate principal amount of 10 percent notes on May 26, 2022. The Redemption is conditioned upon the receipt by the Issuer of net cash proceeds from the new financing. There can be no assurances as to when or if such condition will be satisfied and the Issuer may waive the condition at its discretion, it was stated.
Following the planned redemption, $335 million principal amount of 10 percent notes will remain outstanding.
The new CMBS loan will be secured by a pool of five open-air centers owned in a 92/8 joint venture and located in Chattanooga. The open-air centers include Hamilton Crossing, Hamilton Corner, The Terrace, The Shoppes at Hamilton Place, and Hamilton Place - Regal. At closing the centers will be released from their guaranty obligation under the 10 percent notes.
The loan will have a 10-year term with a fixed interest rate determined at closing and based upon an agreed upon spread plus the greater of the 10-year swap rate or 10-year U.S. Treasury Rate. The rate is expected to be in the range of 5.5-5.75 percent, assuming interest rates at closing are comparable to today’s rates. The loan is expected to close on or around May 25, subject to completion of customary due diligence and documentation.