By Akiko Matsuda

The owner of the Destiny USA shopping center received a five-year extension for the loans backed by the shopping mall known as New York's largest, averting a potential default by the property.

Since last spring, Pyramid Management Group has sought a restructuring of its $430 million commercial mortgage-backed securities for the Destiny USA property in Syracuse, N.Y., hiring legal and financial advisers for the effort.

The two loans -- $130 million and $300 million -- were transferred in April to special servicers because of imminent payment default at the upcoming maturity date of June, according to Morningstar.

But the company said Thursday that it has "successfully worked with its lender" to extend the loans' maturity by five years.

"Now more than ever, lenders and municipalities are realizing the importance of the operator behind these properties," said Pyramid Chief Executive Stephen J. Congel, who added that the extension allows Pyramid to continue to reinvest in the shopping center.

In addition to the $430 million loans, Destiny USA is also obligated on about $286 million in municipal bond debt that was downgraded deeper into junk territory by Fitch Ratings in May. Pyramid didn't immediately return a request for comment Thursday.

Write to Akiko Matsuda at Akiko.Matsuda@wsj.com

(END) Dow Jones Newswires

June 23, 2022 19:29 ET (23:29 GMT)