CBL Properties has taken several steps to shore up its financial position, given the significant decline in rental income over the past few months. It drew down the remaining $280 million on its credit line to bolster its cash position. It also delayed or suspended $60 million to $80 million of capital spending, including most of its major redevelopment projects.
The REIT is also working with lenders to address its debt, which stood at nearly $4.5 billion at the end of the first quarter. It has hired advisors to explore alternatives to help reduce its overall leverage and interest expenses as well as extend the maturities on its debt.
However, the company warned in an SEC filing that "there is substantial doubt about our ability to continue as a going concern." It was not in compliance with the covenants under its senior secured credit facility as of the end of the first quarter, which could cause lenders to accelerate this debt's maturity date. Meanwhile, it chose not to make the June interest payment on some unsecured bonds that mature in 2023 and has since entered into forbearance agreements with more than 50% of those creditors to buy it a bit more time to either make the payment or restructure this debt. If the company can't reach acceptable terms with its lenders, it might need to file for bankruptcy to restructure its debt.