General Growth has deal for new loan

General Growth Properties Inc., the second largest mall operator in the U.S., said it has an agreement for a new $400 million bankruptcy loan from Barclays Plc.

General Growth is seeking court permission to use the new financing to replace its existing $400 million bankruptcy loan, it said yesterday in papers filed with the U.S. Bankruptcy Court in Manhattan.

The mall owner said it will save $2.7 million per month in interest payments under the new agreement, "thereby preserving value in General Growth that would otherwise be lost," if it didn't repay the original loan.

General Growth, based in Chicago, filed for bankruptcy last year after amassing a $27 billion debt load making acquisitions. It has said it expects to file its plan to restructure its remaining debt this week.

The new financing comes with a 5.5 percent interest rate compared with a variable interest rate under the existing loan, which is currently at 13.5 percent, the lowest rate possible, General Growth said.

The case is In re General Growth Properties Inc., 09-11977, U.S. Bankruptcy Court, Southern District of New York (Manhattan).