An $885M leveraged loan to refinance Brookfield Properties Retail’s maturing debt isn't going forward as planned.
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Wells Fargo was marketing the debt as a leveraged loan to investors and had even sweetened its offer before it decided to push the deal to a later date, Bloomberg reported.
The bank originally launched the leveraged loan for Brookfield Properties Retail — which owns more than 130M SF of retail space across seven countries, according to its website — in late March.
The initial terms were set at a spread of 2.75%-3% over the Secured Overnight Financing Rate, which is an interest rate based on overnight borrowing collateralized by Treasury securities, and a 99.5-cent discount on the dollar, Bloomberg reported.
The bank then extended the commitment date to April 15 and widened the pricing to 3.25%-3.5% over SOFR with a 98-cent discount, but the deal still failed to attract enough demand, according to Bloomberg.
“We are going to take some time while the markets stabilize, and we will address when the market situation is more certain,” a Brookfield spokesperson told Bisnow in a statement. “We are confident we will be able to address by the maturity.”
Wells Fargo declined to comment.
The refinancing delay mirrors broader instability in the leveraged loan market, where riskier debt deals have struggled to gain traction, according to Bloomberg, following the economic uncertainty triggered by President Donald Trump’s tariffs implemented on April 2 and then altered hours later.
U.S. retail shoppers began stocking up before tariffs took effect, with sales increasing by 1.4%, the largest gain since January 2023, according to a Reuters analysis of the Commerce Department’s Census Bureau.
Brookfield's retail real estate portfolio has been facing challenges recently. After Brookfield Property Partners spent nearly $9B in 2018 to acquire mall owner General Growth Properties, it planned to transform the malls with vast redevelopment ambitions.
Yet, six years and $2.5B in property upgrades later, the company had only completed renovations in Atlanta and Seattle, The Wall Street Journal reported last year.
This month, Brookfield failed to pay off a $260M loan tied to the Pembroke Lakes Mall in South Florida, which was transferred to special servicing.
UPDATE, APRIL 17, 7 P.M. ET: This story has been updated with a statement from a Brookfield spokesperson.
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