CBL and Associates Properties (OTC:CBL), a real estate investment trust (REIT), filed a report with the Securities and Exchange Commission on Wednesday that it was entering forbearance talks with holders of its unsecured notes due in 2023 after it missed an interest payment.
CBL operates 108 shopping centers, mostly in the Southeast, and has been reeling from the impact of the pandemic as tenants miss rent payments. It took in 27% of billed rents in April, and was expecting a similar amount for May.
"The Company is continuing to engage in negotiations and discussions with the holders and lenders of the Company's indebtedness," CBL said in the filing. "There can be no assurance, however, that the Company will be able to negotiate acceptable terms or to reach any agreement with respect to its indebtedness."
Pandemic ripple effects
CBL was not able to meet an $11.3 million interest payment due on June 1, and has now missed the monthlong grace period that ended June 30. The company has entered into a forbearance agreement with debt owners that is set to terminate on July 15.
Since CBL defaulted on the payment, certain owners of the 2023 notes have the right to demand the full value of the notes. If the company is considered in default and forced to pay on these notes, it will give owners of 2024 and 2026 notes the right to demand their value as well.