CBL Properties Closes $176 Million Non-Recourse Financing
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floating‑ratefinancial
Floating-rate describes an interest rate on a loan, bond, or other debt that moves up or down over time based on a published short-term market rate, so the cash interest paid by the instrument changes as that reference rate changes. For investors, floating-rate instruments reduce the risk of losing purchasing power when market rates rise because income increases with rates (and falls when rates drop); think of the payout like a boat rising and falling with the tide, rather than being tied to a single fixed level.
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A non‑recourse loan is a type of financing where the lender’s repayment claim is limited to a specific asset pledged as collateral, and the borrower is not personally liable beyond that asset. Think of it like buying a car with a loan where the lender can only take back the car if payments stop, not the borrower’s other possessions. For investors, non‑recourse structures matter because they concentrate downside on the pledged asset, affecting risk, recovery prospects in defaults, and how attractive or costly financing appears for a business.
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A term loan is a type of loan that is borrowed for a set period of time, with a fixed schedule for repaying the money, usually in regular payments. It matters to investors because it represents a company's borrowing costs and financial stability; reliable repayment of these loans can indicate strong financial health, while difficulties may signal potential risks.
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The Secured Overnight Financing Rate (SOFR) is a market benchmark that measures the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Investors watch SOFR because it acts like a speedometer for short-term interest costs—affecting loan rates, bond yields and the pricing of interest-rate contracts—so movements change borrowing expenses, cash returns and the value of interest-sensitive investments.
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Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.
Transaction Completes Refinancing of Former $634 Million Secured Term Loan and Advances Balance Sheet Strategy
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--
CBL Properties (NYSE:CBL) today announced that it has closed on a $176 million floating‑rate, non‑recourse loan secured primarily by a pool of three lifestyle and open‑air centers. The financing represents the second and final component of the Company’s refinancing of its former $634 million secured term loan.
The new loan with Beal Bank USA is secured by Mayfaire Town Center (Wilmington, NC), Pearland Town Center (Pearland, TX), Southaven Town Center (Southaven, MS), and East Towne Mall (Madison, WI), all of which served as collateral under the prior term loan. The loan carries a five‑year term, includes two one‑year extension options, and is interest‑only with a floating interest rate of SOFR + 410 basis points.
“The closing of this $176 million loan completes a transformative refinancing strategy that significantly improves our balance sheet and long‑term financial outlook,” said Ben Jaenicke, EVP – Chief Financial Officer. “The strong lender engagement, attractive terms, and interest‑only structure underscore the quality of our assets and our disciplined execution. With the completion of this loan, we have extended our maturity profile and improved the flexibility of our capital structure as we continue executing our long‑term strategy.”
The transaction follows the Company’s previously announced closing of a $425 million non-recourse financing secured by a pool of enclosed mall assets. Together, the two financings complete the refinancing of the former secured term loan, extending the maturity by five years to 2031, enhancing CBL’s liquidity with a more than $30 million estimated annual improvement in free cash flow and reducing overall debt by more than $33 million. Following the close, CBL’s estimated cash balance stands at more than $291 million.
Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 88 properties totaling 55.6 million square feet across 23 states, including 56 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 25 open-air centers and other assets. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.
Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.
