BALTIMORE, MD-The sale of four outlet centers and payment of some short-term debt is keeping Prime Retail Inc. out of bankruptcy court. The REIT defaulted on a $20 million subordinate loan from FBR Asset Investment Corp., due in September that triggered other default provisions.

The $240 million sale of four outlet centers to Chelsea GCA Realty Inc. and Fortress Investment Group yielded net proceeds of $174 million to Prime. These funds paid $125 million in short-term debt.

Other deals in the mix include:·A $90 million mezzanine loan from Fortress and Greenwich Capital Financial Products Inc. The three-year loan rate is one-month Libor plus 950 basis points — 15.66% based on the current rate. In exchange for the loan, Fortress and Greenwich received warrants, with a $1/share exercise price, to buy up to 1 million common shares of Prime.·A $20 million first mortgage from Greenwich Capital backed by a recently opened outlet center in Puerto Rico. The three-year floater amortizes over a 25-year schedule for its first year and over a 15-year schedule thereafter. Its rate is tied to one-month Libor plus 350 bp.·A $10 million second mortgage that Mercantile-Safe Deposit and Trust Co. provided on Prime’s outlet in Hagerstown, MD. The 30-month’s maturity coincides with that of a $49 million first mortgage from Mercantile at Libor rate plus 250 bp.Prime extended two mortgages: a $112 million first mortgage from Nomura Asset Capital Corp. and a $20 million mortgage from KeyBank.

Nomura’s June 11, 2001 maturation was extended to December 2003. Prime must pay a rate of 13% plus a $1.1 million extension fee. Monthly amortization is a minimum of $50,000 or 50%.

KeyBank’s loan, due on Dec. 31, is extended through June 30, 2001. The rate increased by 125 bps to one-month Libor plus 300 bp. Prime paid $1 million on the principal.

Union Labor Life Insurance Co. is foreclosing on the REIT’s Bellport, NY outlet center. Fru-Con Development Corp., both lender and partner, is owed $30 million for a center in New River, AZ and $13 million for a property in Oxnard, CA.

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