Moody’s Investors Service cut its ratings on General Growth Properties Inc., citing the mall owner’s “strained financial flexibility” as it tries to pay off $1.7 billion in loans coming due in the next six months.
The New York-based ratings agency said it lowered its rating on the Chicago-based company’s senior secured bank debt to Ba3 from Ba2. It also reduced its ratings on General Growth’s operating partnership’s senior secured bank debt to Ba3 from Ba2 and its Rouse Co. subsidiary’s senior unsecured debt, also to Ba3 from Ba2.
The downgrade comes after a wild week for the REIT, whose shares fell 48% Thursday amid growing concerns about the company’s ability to refinance loans in the country’s current credit crisis. The stock rose more than 27% Friday, closing at $9.67, after General Growth said it was suspending its dividend and Chief Financial Officer Bernard Friedman had left the company.
Moody’s said “the severity of the deteriorating global credit environment provides little breathing room for the REIT as it struggles to refinance $1.1 billion in mortgages due in November and $600 (million) in unsecured bonds due within six months.”
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