SYRACUSE, N.Y. — A bond rating agency has released a report showing Destiny USA cannot make a $38.9 million payment to meet requirements to extend its forbearance agreement. As a result, the company says, “the special servicer has terminated the forbearance agreement and is planning enforcement action.”
Kroll Bond Rating Agency (KBRA) released its report Tuesday, saying Destiny USA took out a $440 million loan transaction. KBRA says the loans had a five year maturity date in 2019 with a forebarance agreement in effect through June of 2024. However, according to the KBRA, Destiny USA confirmed it was unable to meet its $38.9 million paydown to meet the guidelines for a one-year extension of payments. As such, the lender has terminated itsforbearance agreement. That agreement is typically made between a lender and a delinquent borrower, and usually states the lender will not exercise its legal right to pursue default remedies as long as the borrower agrees to pay the loan and bring it current.
CNY Central reached out to Destiny USA for comment, and they released the following statement from Stephen J. Congel, Chief Executive Officer of Pyramid Management Group:
“Destiny USA has been a landmark in our community for more than 30 years. We are currently engaged with the special servicer regarding modification of the loan and will continue to provide an exceptional experience for our 17 million annual guests and employees.”
KBRA currently values Destiny USA at $65.3 million, far less than the mall’s outstanding loans. KBRA did not specify what actions the lender could take to enforce repayment of its loans, but foreclosure and liquidation of assets could be an option. There is no indication any lender has initiated a foreclosure proceeding on the mall.
