Mall operator gets 2-week loan reprieve

WASHINGTON - Shopping mall owner General Growth Properties Inc. is getting a two-week extension on $900 million in debt that had been scheduled to come due last week as the company works to stave off bankruptcy and negotiate longer-term extensions with lenders.

The mortgages cover two malls, Fashion Show, and Palazzo, in Las Vegas, the company said late Sunday. Shares fell 24 cents to $1.14, mirroring a decline in the broader market.

Chicago-based General Growth Properties, the nation's second-largest shopping mall owner, has been hit hard by the deteriorating US economy and problems at struggling US retailers. Analysts are unsure whether new managers, installed in late October, will be able to keep the company afloat given its staggering debt load.

General Growth's struggles come amid growing concern about debt tied to commercial properties. Industrywide, about $20 billion will be due next year, covering everything from office, and condo complexes to hotels, and malls.

The retail outlook is particularly bad. Circuit City Stores Inc. and Linens 'n Things have sought bankruptcy protection. Home Depot Inc., Sears Holdings Corp., and Ann Taylor Stores Corp. are closing stores.

General Growth said in a Securities and Exchange Commission filing last month that it faces nearly $3.1 billion in maturing debt next year, and warned that inability to refinance that debt "raises substantial doubts as to our ability to continue as a going concern."

Deutsche Bank analysts Lou Taylor and Vin Chao predicted yesterday the company will likely receive a longer-term loan extension, rather than default, allowing General Growth to sell off assets or obtain new corporate-level financing.

General Growth has a stake in more than 200 US shopping malls in 44 states. It is trying to sell its Las Vegas locations.

Shares of General Growth have lost 91 percent of their value since the end of September.