Moody's assigns CBL, loan B3

Moody's Investors Service said it assigned a B3 corporate family rating and a speculative grade liquidity rating of SGL-3 to CBL & Associates LP. The agency also gave a B3 rating to the senior secured term loan issued by its subsidiary, CBL & Associates Holdco I, LLC.

“CBL's B3 ratings reflect the REIT's improved financial profile following its emergence from bankruptcy, with reduced leverage, strong fixed charge coverage and positive free cash flow that will allow for continued debt reduction. CBL also has only modest near-term financing risk, as upcoming maturities comprise non-recourse mortgages which we expect the REIT will either refinance or convey the properties back to the lender. The REIT has also made progress towards repaying its $395 million 10% secured notes, announcing a $60 million partial redemption funded with proceeds from a new non-recourse loan expected to price at a significantly reduced rate,” the agency said in a press release.

However, weak earnings with declining leasing spreads and mixed overall asset quality challenge the REIT’s credit profile, Moody’s said.

CBL used the loan to help finance the retail REIT's recapitalization and emergence from bankruptcy on Nov. 1. The loan is supported by a collateral pool comprised of 16 malls, three lifestyle centers and three open-air centers.

The outlook is stable.

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