Water Tower Place Wins Loan Extensions, Loses Investors

General Growth Properties Inc., the second-largest U.S. mall owner, received two loan extensions this week. But confidence in the company continued to sink among analysts and investors, as the stock price dropped 17.5 percent to under a dollar Tuesday.

GGP, which owns more than 200 mall properties including Chicago's Water Tower Place, said late Sunday that its creditors had granted a two-week "interim extension" on $900 million of debt on mortgage loans for two of its shopping malls. It announced Monday an agreement with a lender to extend the maturity date of $58 million in notes to Dec. 11.

Since the announcements however, analysts have affirmed that the Chicago-based company's troubles are far from over because of significant overleveraging in the last few years.

"Even if GGP effectively addresses the current $900 million in debt obligations that are now due, it will be challenged to effectively meet all of its future obligations," Todd Lukasik, an analyst with Chicago-based Morningstar Inc., said. "It has more than $3 billion in debt due in 2009, nearly $4 billion due in 2010, and more than $7 billion due in 2011. So, this $900 million is really just the tip of the iceberg."

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