S&P rates CBL B, loan BB-

S&P said it assigned B issuer ratings to CBL & Associates Properties Inc. and its subsidiary CBL & Associates HoldCo I LLC. The agency also gave BB- issue-level and 1 recovery rating, indicating very high (90%-100%; rounded estimate 95%) recovery in a hypothetical default, to CBL's senior secured term loan due in 2025. CBL emerged from bankruptcy in November.

“We view CBL's mid-size portfolio of primarily B quality mall assets less favorably than the portfolios of higher-rated mall operators. CBL's portfolio consists of 91 properties totaling 54.4 million square feet, located in secondary and tertiary markets across the U.S., which tend to have lower median household incomes and population density than peers,” S&P said in a press release.

CBL emerged with $1.8 billion less in debt and preferred obligations than before bankruptcy. “While it does not have a revolving credit facility, it does currently have a larger amount of cash and cash equivalents($336 million in cash and treasuries) and we expect positive funds from operations (FFO) generation,” the agency said.

The outlook is stable, reflecting an expectation for mall operating performance to gradually stabilize over the next one to two years, S&P said.

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