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General Growth rises on first day after exit from bankruptcy

General Growth Properties Inc., the company that exited the largest U.S. real estate bankruptcy yesterday, rose 6.7 percent in New York in its first day of trading as solely a mall landlord.

General Growth retained its mall properties and spun off its commercial and land-development business as part of the reorganization. The real estate development company, Howard Hughes Corp., began trading today on standalone basis.

“They're out, they've accomplished their near-term goal,” Bill Kavaler, an analyst at Oscar Gruss & Son Inc. in New York, said of General Growth. “We'll see how it performs as a company and a stock now that they're out and on their own.”

General Growth, the second largest U.S. shopping-mall owner, plans to pay a regular quarterly dividend of about 10 cents a share starting next year, the Chicago-based company said in a statement today. It will also pay a one-time dividend tied to 2010 income, with 90 percent in shares and 10 percent in cash.

The company filed for Chapter 11 protection in April 2009 after weighing itself down with $27 billion in debt that it was unable to refinance because of the financial crisis and collapse of the commercial mortgage-backed securities market. The company's restructuring plan provided a full recovery for creditors and a rare recovery for shareholders.

General Growth rose 93 cents to $14.73 at 4:15 p.m. in New York Stock Exchange composite trading, after earlier reaching $14.85. It was the biggest gain since July. Hughes Corp. shares were at $36.90 on its first day of trading as an independent company.

The landlord also said it agreed to sell the Gateway Overlook Shopping Center in Columbia, Maryland. The $90 million transaction will reduce General Growth's debt by about $55 million.

General Growth said it decided to pay a $220 million settlement to the heirs of Howard Hughes in cash rather than shares. General Growth also plans to pay off a $350 million loan from Pershing Square Capital Management LLP in cash.

Simon Property Group Inc., based in Indianapolis, is the largest U.S. mall owner.