Ala Moana buyer
Bloomberg News
to close $2 billion
in refinancingCHICAGO -- General Growth Properties Inc., which is buying Ala Moana Center, said it expects to complete by the end of June the refinancing of about $2 billion of debt, one of biggest such transactions ever done.
The Chicago-based real estate investment trust, one of the largest shopping-mall companies in the United States, has commitments from lenders to provide mortgage financing for a "majority" of the funds needed, said Bernard Freibaum, chief financial officer. The mortgages will be secured by 22 malls the company and its partners purchased last year.
General Growth is among the leaders in the rapidly consolidating mall business.
The company has bought $5.7 billion of properties since mid-1993. It now owns and manages 125 malls in 39 states with a total of 100 million square feet of space, up from 90 million square feet a year ago.
Proceeds from the loans will be used to pay off borrowings under the company's credit lines that helped pay for the acquisitions. They will also help fund its purchase of the Ala Moana Center.
Last week, the company announced that it would buy Hawaii's largest shopping center for $810 million, from financially ailing Daiei Inc. of Japan. General Growth currently manages the center for Daiei.
The new mortgage debt will carry a fixed-interest rate of about 7 percent, about the same as its current debt, but the maturities will be longer at about 10 years. That's in line with what the company expected when it launched the refinancing effort earlier this year, Freibaum said.
