This story was updated Wednesday, August 5, 2020, at 6:50 p.m. with more information.
Mall owner CBL & Associates Properties Inc. on late Wednesday said it made two interest payments on some of its debt, which sent its shares soaring in after-hours trading.
The Chattanooga-based company said in a Securities and Exchange Commission filing that it made an $11.8 million interest payment that was due and payable on June 1 to holders of the 5.25% senior unsecured notes due 2023.
Also, the company made an $18.6 million interest payment that was due and payable on June 15 to holders of the 5.95% senior unsecured notes due 2026.
The company said in the filing that nonpayment of the interest no longer constitutes an event of default under its bank credit agreement and its forbearance agreement with lenders under that agreement is terminated.
The announcement was made after the close of the markets. In after-hours trading, the shares had risen by double-digit percentages.
CBL, which runs both Hamilton Place and Northgate malls in the city along with more than 100 properties nationally, had been facing a Wednesday deadline after receiving extensions on a forbearance period from lenders related to 2023 and 2026 notes.
More than a month ago, the company elected to not make the interest payments and started talks with the lenders.
The company faced a revenue crunch after shut downs earlier this year of its shopping centers due to the coronavirus outbreak.
This is a developing story. Stay with the Times Free Press for updates.
Mall owner CBL & Associates Properties Inc. on Wednesday said it made two interest payments worth $30.4 million on some of its debt, which sent its shares soaring in after-hours trading.
The Chattanooga-based company said in a Securities and Exchange Commission filing that it made an $11.8 million interest payment that was due and payable on June 1 to holders of 5.25% senior unsecured notes due 2023.
Also, the company made an $18.6 million interest payment that was due and payable on June 15 to holders of 5.95% senior unsecured notes due 2026.
The company said in the filing that nonpayment of the interest no longer constitutes an event of default under its bank credit agreement and its forbearance agreement with lenders under that agreement is terminated.
The announcement was made after the close of the markets. In after-hours trading, the shares had risen by double-digit percentages.
CBL, which runs both Hamilton Place and Northgate malls in the city along with more than 100 properties nationally, had been facing a Wednesday deadline after receiving extensions on a forbearance period from lenders related to 2023 and 2026 notes.
More than a month ago, the company elected to not make the interest payments and started talks with the lenders.
The company faced a revenue crunch after shut downs earlier this year of its shopping centers due to the coronavirus outbreak.
Chris Kuiper, vice president of equity research at CFRA Research, said malls had been struggling and generally falling out of favor among shoppers, and then the coronavirus hit.
“It went from bad to worse and then catastrophic,” he said. “COVID has accelerated the trend.”
On Thursday, CBL plans to report second quarter earnings.
READ MORE: Chattanooga-based mall owner CBL continues work on debt deal
In May, the company posted a first quarter net loss of $133.9 million, compared to a net loss of $50.2 million a year ago.
Also in May, CBL reported it received just 27% of billed cash rents for April and its May collection rate likely will be in the 25% to 30% range amid closings during the outbreak.
In June, CBL said there was “substantial doubt” it will continue to operate as a going concern.
Earlier in July, CBL’s shares plunged after Bloomberg reported the company may be preparing a bankruptcy filing.
Contact Mike Pare at [email protected]. Follow him on Twitter @MikePareTFP.
