General Growth (GGP) Trying To Sell Mountains Of Debt

Earlier today, the WSJ reported that General Growth Properties (NYSE: GGP) is targeting private-equity firms, hedge funds and other investors in order to sell $1.5 billion to $2 billion in preferred shares. General Growth is trying to raise monies now because it has billions of debt coming due in the next few months.

General Growth's bankers' Goldman Sachs Group have reached out to the Blackstone Group LP, Colony Capital LLC and Vornado Realty Trust, according to people familiar with the situation. General Growth money raising efforts has been led by Goldman's Byron Trott, the same broker who conducted similar sales for Goldman Sachs (NYSE: GS) and General Electric (NYSE: GE) to Warren Buffett's Berkshire Hathaway Inc., (NYSE: BRK.A), the WSJ said.

The Wall Street Journal said, so far it is unclear whether General Growth has found any takers of the preferred shares that could eventually be converted to common stock. General Growth's spokesman said, "We are actively pursuing all alternatives."

The Journal did note that selling preferred shares will be difficult as preferred shares rank behind bondholders and mortgage holders in bankruptcy court, which analysts have said is a possible outcome for General Growth in a worst-case scenario.

General Growth Properties, Inc. (GGP) is a self-administered and self-managed real estate investment trust (REIT).
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