CBL eyes debt reduction, shift to higher-productivity assets

By Lisa Kerner

Charlotte, N.C., April 11 - CBL & Associates Properties, Inc.'s goal is "to accelerate and drive growth through smart repositioning strategies and to use our retained capital optimally," according to chief financial officer Farzana Mitchell.

Mitchell made her comments during a conference call on Friday to provide an in-depth review of CBL's business strategy and initiatives to enhance shareholder value.

Chief executive officer Stephen Lebovitz said the company plans to increase its portfolio weighting to higher-productivity assets.

"We plan to achieve this through targeted divestitures of stable but lower-growth malls and non-core properties over the next several years as well as accretive investments in higher growth assets," Lebovitz said.

Since articulating its plan in the third quarter of 2012, CBL has received two investment-grade ratings and completed its inaugural bond offering.

"We are now attentive to further improving our credit metrics and building a high-quality unencumbered asset pool," said Mitchell. "This will continue to reduce our cost of capital and provide us with more opportunities to access the capital markets at the best possible time."

CBL's goal is to reduce leverage to less than 50%, correspondingly lowering its debt/EBITDA multiple to less than seven times. The company also wants to improve its fixed-charge coverage ratio to greater than 2.7 times.

"We have already made significant progress by reducing absolute debt levels over $1 billion since 2008 with corresponding improvements in our leverage ratios," Mitchell said.

In addition, CBL is "committed to growing the size and quality" of its unencumbered asset pool and plans to retire debt on its wholly owned assets at the earliest prepayment date," according to Mitchell.

Through 2018, CBL's mortgage maturities provide the opportunity to retire about $1.6 billion of secured debt with a gross book value of $2.8 billion.

CBL is a Chattanooga, Tenn.-based owner and developer of malls and shopping centers.

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