"The Fortress transaction is intended to stabilize the company's financial condition and strengthen the company's balance sheet by reducing our overall level of debt and extending certain loan maturities," says Glenn D. Reschke, Prime Retail's chairman, president and CEO.
The proceeds from the mezzanine loan, the Puerto Rico mortgage loan, and the sale of the four outlet centers will be used to pay off up to $117 million of Prime Retail's short-term debt, some of which is currently in default. The remainder of the proceeds will be used for general corporate purposes, including the funding of certain programs to attract and retain tenants through increased marketing and capital improvements.
The $71-million loan will be secured by pledges of equity interests in certain outlet centers. Negotiations are underway regarding numerous conditions attached to the proposed transaction.
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