Centro NP in talks with revolver lenders, looks to address short-term liquidity needs

By Caroline Salls

Pittsburgh, Nov. 14 - Centro NP LLC said it is working with its revolving credit facility lenders to refinance its short-term debt, and it is considering additional plans to meet its short-term liquidity requirements, according to a 10-Q filed with the Securities and Exchange Commission.

Centro said it is prohibited by debt agreement covenants from incurring additional debt, and the company is limited to distributions received from its Residual Joint Venture to meet short-term liquidity requirements.

The company said $306.8 million of revolver debt is scheduled to mature on Dec. 15, and $4.7 million of mortgage debt is scheduled to mature this year.

According to the 10-Q, the company historically met its short-term liquidity requirements with cash generated from operations and credit facility borrowings. However, an amendment to the company's July 2007 revolver prohibits it from making draws on the revolver.

If the company is unable to negotiate additional capacity under its Preston Ridge credit facility, which is used to fund the joint venture distributions, or negotiate other liquidity facilities, it may be unable to finance its joint venture obligations after the $80 million Preston Ridge facility is exhausted.

As of Sept. 30, Centro said it had $24.8 million in available cash, cash equivalents and marketable securities.

Centro said its short-term liquidity requirements consist primarily of funds needed to pay for management fees, operating and other expenses directly associated with its portfolio of properties, interest expense and scheduled principal payments on outstanding debt, capital expenditures incurred to facilitate the leasing of space and capital expenditures incurred in its development and redevelopment projects.

Additionally, Centro said its DownREIT Partnership entered into amendments with redemption agreement limited partners that extend the partners' class A preferred unit redemption rights to Dec. 1 from Sept. 15.

The amendment also gives DownREIT or Centro the right to use $27.5 million of net proceeds from the sale, mortgage or transfer of assets for general corporate purposes.

If the company does not provide full payment of the redemption amounts to these limited partners by Dec. 1, interest on the redemption amount will accrue at 15%, retroactive to Sept. 15.

Centro is a New York-based real estate company.

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