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CBL Properties Enters Agreement With Credit Facility Lenders, Unsecured Noteholders

March 22, 2021, 07:00 AM
Filed Under: Real Estate

CBL Properties entered into an amended and restated Restructuring Support Agreement (the “Amended RSA”) with its credit facility lenders and unsecured noteholders that provides for a fully consensual comprehensive restructuring. The Amended RSA was entered into by the Company, lenders representing more than 88% of the outstanding balance of its secured credit facility (the “Bank Lenders”) and certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts, or other entities (the “Consenting Noteholders”) representing in excess of 64% 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 transactions outlined in the Amended RSA will be implemented in the cases commenced by the Company and certain related subsidiaries under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) and pursuant to an amended joint chapter 11 plan of reorganization to be filed in the Chapter 11 Cases (the “Amended Plan”). The Amended RSA represents a comprehensive settlement between the parties of substantially all key issues relating to the chapter 11 cases, including the ongoing litigation between the Company and the Bank Lenders arising from the prepetition enforcement actions taken by the Bank Lenders.

“This agreement is a major step forward for CBL’s restructuring plan,” said Stephen D. Lebovitz, Chief Executive Officer of CBL. “Reaching a fully consensual plan between our credit facility lenders and noteholders has been a primary goal throughout this process. The plan we are announcing today achieves all of the major objectives we have set for CBL post-emergence, including greater financial flexibility with a significantly deleveraged balance sheet, a lengthened maturity schedule and overall lower interest expense. With this agreement in hand, we look forward to moving ahead with the court approval and confirmation process and are confident that the restructured company will be in an excellent position to execute on our strategies and return to growth.”

The terms of the Amended RSA outline a revised plan for restructuring the Company’s balance sheet that provides for the elimination of more than $1.6 billion of debt and preferred obligations as well as a significant reduction in interest expense. In exchange for their approximately $1.375 billion in principal amount of Unsecured Notes and $133 million in principal amount of the secured credit facility, Consenting Noteholders and other noteholders will receive, in the aggregate, $95 million in cash, $555 million of new senior secured notes, of which up to $100 million, upon election by the Consenting Noteholders, may be received in the form of new convertible secured notes and 89% in common equity of the newly reorganized Company. Certain Consenting Noteholders will also provide up to $50 million of new money in exchange for additional convertible secured notes. The Amended Plan provides that the remaining Bank Lenders, holding $983.7 million in principal amount under the secured credit facility, will receive $100 million in cash and a new $883.7 million secured term loan. Existing common and preferred stakeholders are expected to receive up to 11% of common equity in the newly reorganized company. The Amended RSA is subject to Bankruptcy Court approval, which the Company will seek in accordance with the terms of the Amended RSA.

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