CHICAGO-Locally based General Growth Properties Inc.’s board of directors has officially approved the spin-off of its subsidiary, Rouse Properties Inc. The spin-off will be completed through a pro rata taxable dividend of voting common stock of Rouse Properties held by GGP on Thursday, Jan. 12, 2012 to GGP stockholders of record as of the close of business on the New York Stock Exchange on Friday, Dec. 30, 2011.

As GlobeSt.com previously reported, CEO Sandeep Mathrani said the trust was on track to complete this spinoff by year end, and that a CEO should be forthcoming. “We have narrowed the candidates and we hope to make an announcement in the very near term,” he said. In August, GGP filed its formal Form 10 registration Monday with the Securities and Exchange Commission to distribute the 21.1-million-square-foot, 30-mall portfolio, named Rouse Properties, to GGP stockholders through a taxable dividend plan.

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On the distribution date, for every share of GGP common stock owned as of the record date, GGP stockholders will receive approximately 0.0375 shares of Rouse Properties' common stock representing a distribution ratio of 1:26.66. Approximately 35.5 million shares of Rouse Properties' common stock are expected to be outstanding immediately following the spin-off. The distribution of these shares will be made in book-entry form, which means no physical share certificates will be issued, according to a prepared statement.

Rouse Properties recently filed an amendment to its registration statement with the SEC, which includes information about Rouse Properties' financial results, business and strategy, and other important information. As previously disclosed in the Form 10, and reported on GlobeSt.com, Rouse Properties had historical core net operating income of approximately $113.1 million for the nine months ended September 30, 2011. As further discussed in the Form 10, the amount does not represent a complete measure of Rouse Properties' anticipated results as a stand-alone public company once the spin-off is completed.

On the Distribution Date, Rouse Properties is expected to have approximately $1.16 billion of debt outstanding with a weighted average interest rate of approximately 5.6% comprised of approximately $724 million of existing mortgage debt and a new three year senior secured term loan of approximately $433.5 million, according to a prepared statement.

The senior secured term loan will be provided by a syndicate of lenders with Wells Fargo Bank, as administrative agent, and Wells Fargo Securities, RBC Capital Markets, and US Bank National Association as joint lead arrangers.

The senior secured facility also includes a revolving credit facility in the amount of $50 million. In addition, Rouse Properties finalized the terms of a three and a half year subordinated unsecured revolving credit facility with an affiliate of Brookfield Asset Management Inc. that will provide borrowings on a revolving basis of up to $100 million.

GGP intends to report the distribution of Rouse Properties common stock as a taxable dividend for US federal income tax purposes and, therefore, the distribution of Rouse Properties common stock is expected to satisfy a portion of GGP's 2011 and 2012 REIT taxable income distribution requirements, according to the statement.

Following the spin-off, GGP's common stock will continue to trade on the NYSE under the symbol GGP. Rouse Properties intends to have its common stock listed on the NYSE under the symbol "RSE".

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GGP Approves Spin-off, Reveals Capital Structure

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