Company chairman, president and CEO Glenn D. Reschke said instead of paying dividends, Prime Retail intends to use cash flow from its operations to pay off short-term debt, fund property renovations and fund marketing. He added that the terms of the mezzanine loan provided by Fortress Registered Investment Trust and Greenwich Capital Financial Products Inc., which closed Dec. 22, bar the company from paying distributions except to the extent necessary to maintain its REIT status.

The announcement affects both the company's preferred and common stock. Specifically, it impacts its 10.5% Series A senior cumulative preferred stock, 8.5% Series B cumulative convertible preferred stock, and common stock.

Prime Retail, a self-administered, self-managed REIT, says its portfolio includes 13.5 million sf of property in 48 outlet centers in 25 states and Puerto Rico. It also holds community shopping centers totaling 227,000 sf of GLA and 154,000 sf of office space.