Centro Extends $2.7B of US Loans

NEW YORK CITY-In what group CEO Robert Tsenin calls “important initial steps” in assessing its restructuring options, Australian shopping mall owner Centro Properties Group has lined up $659 million in new financing and a one-year extension on $2.3 billion of existing debt in its US operations. The financings encompass Centro NP, its Super LLC parent and the joint venture Centro NP Residual Holding LLC. In a release from Centro NP LLC’s New York office, the company says the transactions “improve the debt maturity across all three entities.”

The $659 million in term loans obtained by Centro NP mature in 10 years and carry a fixed interest rate of 6.75%, the company says. Stacey Slater, SVP of investment management, tells GlobeSt.com the loans are backed by 76 retail properties across the US and came through Centro NP’s existing lender network. She declines to identify the lenders. Locally, Centro NP’s holdings include DSW Plaza in New York City.

Proceeds from the loans will be used to repay $469.3 million of Centro NP debt that’s due to mature by the end of this year, including a $350-million secured revolving credit facility with a balance of $305.6 million. A $103.4-million REMIC loan due in June 2028 will also be repaid. The balance of the loans will be used to address future debt maturities, says Centro.

In addition, Super LLC—a joint venture of Centro Properties Group, Centro Retail Trust and the Centro MCS 40 syndicate—has gotten a one-year extension on a $1.7-billion bridge loan and $580 million of additional debt, all set to mature by Dec. 31, 2010. The additional debt includes a $370-million credit facility that has $352.5 million outstanding, a $122.5-million secured term loan and the $105-million Preston Ridge credit facility, which is backed by the 904,000-square-foot Centre at Preston Ridge in Frisco, TX. The extension does not change credit margins on any of the extended facilities, according to Centro.

In all, the Centro organization has addressed slightly more than $2.7 billion of $3.2 billion in debt that’s coming due. In a release from Centro’s Australian headquarters, the company says “a number of options to address the remaining balance of approximately $440 million are being considered, and we remain confident these will be resolved in due course.”

Michael Carroll CEO of Centro Properties Group US, says in a statement that the company is pleased “to have been able to secure the largest single borrower retail financing this year.” He adds that the transactions represent “ critical steps in positioning Super LLC within Centro Properties Group’s global restructuring of its US and Australian platforms and are indicative of the strong support of our US lending group.”

Centro began evaluating its restructuring options at the beginning of this year, and Tsenin says in a statement, “We have made good progress and have commenced discussions with our lenders on potential restructuring options we have under consideration. He adds that any restructuring “will be complex, with numerous structural, financing and stakeholder considerations to manage and no decisions have been made at this stage.”