CBL notes eyed after receiving default notice; Bombardier trades up despite ratings cut

By James McCandless

San Antonio, Aug. 26 – Newsmakers in the property and manufacturing spaces were the focus of attention in the distressed debt market on Wednesday.

CBL & Associates Properties, Inc.’s notes varied in direction after receiving notices of default from lenders.

The 5¼% senior notes due 2023 garnered 1¾ points to close at 39¾ bid. The 4.6% senior notes due 2024 fell 1 point to close at 38½ bid.

Late Tuesday, the Chattanooga, Tenn.-based real estate investment trust’s operating partnership CBL & Associates LP sent a letter to holders of limited partnership interests regarding the potential impact of its proposed restructuring, Prospect News reported.

The company received notices of default and reservation of rights letters from credit agreement agent Wells Fargo Bank as a result of the partnership’s failure to comply with restrictive covenants and the failure to make interest payments on its notes before grace periods expired.

The administrative agent declared $1.123 billion of the loans with interest due immediately, which the company says it will seek an immediate stay against.

Meanwhile, manufacturer Bombardier Inc.’s paper improved despite receiving a ratings downgrade.

The 7 7/8% senior notes due 2027 rose ½ point to close at 73 bid. The 7½% senior paper due 2025 added ¾ point to close at 73¾ bid.

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