General Growth (GGP) Asks Bondholders For An Extension

The WSJ reported that General Growth Properties (NYSE: GGP) plans on Monday to begin formally asking holders of $2.3 billion of its bonds to give General Growth a nine month extension to pay back the loans.

The Journal said General Growth will begin a so-called consent solicitation requesting that each bondholder abstain from demanding payment of principal and interest on the debt for the balance of this year.

In order to stay out of bankruptcy court, General Growth needs the majority of its bondholders to agree to the deal. General Growth has a debt load of $27 billion, including $395 million in bonds coming due March 16 and another $200 million in April.

The approval from most of the bondholders is likely, because General Growth negotiated the consent solicitation with two advisory firms representing roughly 60% of its bondholders, people familiar with the matter told the Journal.

General Growth is trading up 15% today to $0.38.

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