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Prime Retail: 'We have not defaulted'

August 16, 2002|by ANDREW SCHOTZ

andrews@herald-mail.com

A Prime Retail spokesman said the company did not default on a mezzanine loan payment due Thursday.

Spokesman Steven Sless would not comment on whether the company actually made the $14.7 million payment owed to Fortress Investment Fund.

He also wouldn't say whether Prime Retail - which owns Prime Outlets at Hagerstown - received an extension to make the payment.

The money had been due July 1, but Prime Retail was given an extension until Thursday.

"We have not defaulted, but if we had, we would have announced it," Sless said Thursday.

As of mid-May, the outstanding principal balance on the three-year mezzanine loan was $36.7 million. The company secured the $90 million loan in December 2000.

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Earlier this year, Robert Brvenik, Prime Retail's chief financial officer, said that even if the company defaulted on the loan, it would not affect its outlet center near Hagerstown.

Brvenik also said at the time that the deadline for the loan payment could be extended to Oct. 31 if the company met certain conditions.

Sless said Prime Retail is in the process of selling an outlet center in Barceloneta, Puerto Rico, 30 miles west of San Juan. The 176,000-square-foot outlet center opened in June 2000.

The money from that sale probably would be used to make the mezzanine loan payment, he said.

"We haven't announced a buyer," Sless said.

He said that a federal regulation about the disclosure of securities information prohibited him from commenting further.

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