Ladies and gentlemen, thank you for standing by. Welcome to the CBL & Associates Properties, Inc., second quarter 2013 conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded Thursday, 1st, 2013. I would now like to turn the conference over to Stephen Lebovitz, President and Chief Executive Officer. Please go ahead, sir.

Thank you, and good morning. We appreciate your participation in the CBL & Associates Properties, Inc. conference call to discuss second quarter results. Joining me today are Farzana Mitchell, Executive Vice President and Chief Financial Officer; and Katie Reinsmidt, Senior Vice President, Investor Relations and Corporate Investments, who will begin by reading our Safe Harbor disclosure.

This conference call contains forward-looking statements within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties. Future events and actual results, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. We direct you to the company's various filings with the Securities and Exchange Commission, including without limitation, the company's most recent Annual Report on Form 10-K. During our discussion today references made to per share amounts are based upon a fully diluted converted share basis. During this call, the company may discuss non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure will be included in the earnings release that is furnished on the Form 8-K along with a transcript of today's comments and additional supplemental schedules. This call will also be available for replay on the Internet through a link on our website at cblproperties.com.

Thank you, Katie. During the second quarter, the CBL team made excellent progress on each of our strategic priorities for this year. As a reminder, these priorities are to sustain the positive momentum in our operating portfolio, add value to our assets to re-developments and expansions, pursue selective new development opportunities, upgrade our portfolio through acquisitions and dispositions and position our balance sheet to achieve an investment grade rating. Our operating performance for the quarter was solid against the top comparable period with 1.8% increase in same Center NOI, adjusted FFO per share growth of 3.8% and occupancy improvements of 70 basis points for the portfolio. Our leasing spread results were encouraging with the double digit increase overall and high single digit renewal spreads. We’ve spent a lot of time meeting with retailers this quarter including both existing and new to CBL companies. In May we attended a very productive ICSC Recon in Las Vegas and followed that up here in Chattanooga June with our own leasing conference connection which was attended by roughly 130 retail representatives. We met with representatives from major tenants in our portfolio such as limited and ULTA as new faces as such Tommy Bahama, Louis Vuitton, and Kate Spade. Our new development and re-development pipeline has grown considerably this year with the announcements of our newest outlet center development in Louisville and the acquisition of the Sears stores at two of our top malls, Fayette Mall and CoolSprings Galleria. In Las Vegas in that connection we successfully advanced the leasing of these recently announced new development re-development projects as well as the other projects we’re pursuing. We also made significant headway leasing our existing portfolio with retailer demand continuing to be strong. As result of this favorable demand our overall portfolio occupancy increased 70 basis…

Thank you, Stephen. As Stephen said one of our major priorities for the year has been to upgrade our balance and keeping leverage in check is the keypart of the strategy. During the second quarter, we were successful in generating nearly a $150 of addition equity through our APM facility at weighted average price at $25.83 per share. This brings our total year-to-date to more than $209 million in net proceeds. These funds were generated prior to the market becoming more volatile in mid-May. We will monitor the market going forward and will be selective with our capital raising activity to ensure that we are achieving fair pricing and minimizing dilution. Another important source of equity capital for us is the sale of non-core and mature assets. Over the past couple of years, we have been successful in selling malls as well as corporate buildings and community centers. While we do not have any specific to announce yet we have had recent success marketing several lower productivity lower mall assets which will allow to improve the quality of the remaining portfolio. We do not announce any pending sales until we have a financially committed buyer that will certainly provide updates as transaction progress and are hopeful to have more details to announce within the next few months. Despite the competitive environment, we have made excellent progress during our outlook portfolio. We are thrilled with the results of our new established centers, the Outlet Shoppes at Atlanta in Woodstock Georgia. The Center opened in mid July 97% lease were committed with 99 stores including Saks Fifth Avenue off 5th, Nike, Coach Asics, Columbia Sportswear and Juicy Couture. The grand opening was a huge success with the jam packed parking lot and traffic lined up for more than a mile on the…

Thank you, Katie. We have significant progress to share with you today on our balance sheet strategy. Just eight months after we announced our intent to pursue an investment-grade strategy, we have received two investment-grade ratings. After a very thorough portfolio and management review with Moody's Investor Services, we achieved our first investment grade rating BA3 with the stable outlook, just ahead of ICSC Recon. We followed that accomplishment by engaging such rating and were able to move quickly with them as well. Last week we received our second investment-grade rating a triple B- from Fitch also with a stable outlook with this second ratings we are now in a position to access the public debt market. We will continue to monitor the market and rate to determine when the most favorable execution can be achieved and depending on market condition will complete a transaction sometime this year. Our intent would be to take advantage of the best execution window to lock in longer term debt at a fixed rate. While it is preliminary to provide firm estimates we would expect a deal size in the $300 to $500 million range depending on investor appetite and the price we can achieve. This week we closed on a $400 million unsecured term loan, proceeds were used to pay down outstanding balances on lines of credit and provide us with flexibility to continue to pay off maturing loans. Based on our current credit ratings the term loan is well priced at 150 basis points over LIBOR for the five year term. Similar to our credit lines the spread improved as our credit rating is upgraded. We have substantially completed the payoff of our 2013 loans, adding the properties to our growing pool of unincumbent assets. In December we anticipate taking advantage of…

With the progress we have made this year, we are confident CBL is on the right track. We have made significant improvements to our balance sheet and are continuing to execute our plan to create a more balanced financing structure. We are pleased to see our progress recognized by the rating agencies with our two investment grade ratings. We appreciate the market support of these efforts and are confident that this capital strategy position CBL to access various pools of capital at attractive pricing. Our focus is also on improving the quality of our overall portfolio to non-core dispositions, accretive acquisitions, new developments and our growing value added redevelopment expansion pipeline. We continue to experience strong demand from existing as well as new retailers and are looking forward to the back-to-school sale season. Supported by limited new supply and high occupancy levels, we are the landlord of choice for expanding retailers in our markets as they look to locate in our portfolio of dominant and growing properties. Thank you for your participation in today’s call. We’ll now be happy to answer any questions you may have.

Thank you. (Operator Instructions) And our first question comes from the line of Christy McElroy with UBS. Please proceed.

Katie, I just wanted to follow up on your comments on efforts to sell lower quality assets. Has the recent volatility in the CMBS market and rising debt cost change your expectations for the kind of cap rates that you’re targeting on dispositions? And can you also give us a sense for the volume? Do you think you can sell over the next six months in the level of cap rates that you are targeting?

We haven’t really seen the CMBS market and the interest rate rises dislocate any of those dispositions that we’ve been working on so far. I think there is still a large spread between where interest rates are and where dispositions are being executed at so there is enough room there to make money. It’s still a historically wide spread. That will probably be a little bit longer before we actually see some dislocation from interest rate rising, they have to rise a little bit farther. We can’t really give you a volume at this point. Dispositions are very cycle and so we don’t like to provide numbers but we are working on a few things and hopefully we’ll have something to announce here throughout the rest of the year. Was there another part to your question, Christy?

No, just the volume and cap rates. Operating expenses seemed a little light in the quarter. Wondering if there was anything one time or seasonal that was impacting that. And can you also disclose what bad debt expense was in Q2 if you haven't already?

Bad debt expense in Q2 was somewhere around $200,000 compared with $230,000. So we had a favorable variance this quarter of about $400,000. So, bad debt was really the main reason, one of the main reasons, expenses were down. And then we had other expenses down in different categories but nothing that really makes the biggest noise.

Okay, so in terms of the sort of operating expense recovery ratio level you’d expect it to be a little bit more normal for the back half of the year?

That’s correct.

Okay, and then just lastly with regard to releasing spreads for a few years now you’ve seen pretty meaningful difference between your new lease spreads and your renewal lease spreads. And your renewals have averaged about, I think about, 1.5% to 2% cash over the last eight quarters. Can you talk about why you think you’re not getting much pricing power in renewals and whether or not you expect that to improve sort of as your occupancy is closer to peak levels? And maybe put that in the context of your approach to new and renewal leasing, Stephen you talked a lot last quarter about proactive replacement of underperforming tenants?

Sure well there is three questions there. I guess on the new leasing what I would say is that that benefits from some of the short-term leasing that we did at fairly low rents and we’re replacing those stores, so we are getting a good pickup in the increase by the new stores that are coming in and it’s a lower comparable so during recession we were preserving occupancy, we were rolling down rents, we were doing what we needed to do. Now we are doing better quality new leasing with higher quality retailers and we are seeing the benefit around the new leasing spreads. Renewals, it’s more of a function of sales and when you factor in the last five years, we had the recession that really depressed sales for a couple of years so there. So even though we have had recovery, when you look at it on an average basis it’s still not that significant and you look at occupancy cost as a percent of sales when you are negotiating those renewals and that’s really the driver behind the flat to slight increases. We are making progress on leasing spreads, renewal spreads have consistently increased last year and then going into this year every quarter it’s getting better. And this quarter when you exclude those the wet seal deals which we view as extenuating because they are really trying to hang on and avoid bankruptcy and we work with them to do their short-term renewals but without those, we had less than 20% of renewals that were three years or less, our renewal spreads were hyped over 8% on an average basis so we were really encouraged by the release of the renewal results for this quarter.

Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed.

I am on with Jordan Sadler as well. Just a follow-up. I was just wondering if you could talk a little bit about the thinking around the wet seal leasing deal and your comments about taking a slightly more aggressive approach in terms of upgrading the quality of the portfolio. I guess my thought was that that meant taking harder stance on pricing versus occupancy and looking to recapture space versus providing your rent relief or I guess concessions? So I was just wondering if you could clarify that strategy a little bit.

Yes wet seal it’s totally consistent with what we did and what our strategy is which is we will do short-term renewals if we don’t have a tenant in place to replace them and then we will push really hard to bring in replacements so that we can either take the space back early because usually when we agree to these short-term renewals with a rent concession we get control of the space and we can terminate early or be in the position at the end of back sell with a better quality stores. So it’s not a change at all, it’s consistent with that and we are seeing more traction with the short-term renewals that we did back during recession now we haven’t been renewing those guys as they come up because we have better retailers to bring in. And also several retailers as you work with them, they show progress. I mean (inaudible) is a great case Charlotte Russe is a great case where a couple of years ago they were really on the brink and we work with them and the other mall landlords work with them as well. And they recovered and now their sales are strong and they are growing and we benefit from the relationship that we developed during those tough times, so it’s a partnership and that’s just the way with the larger retailers, the relationships work overtime.

And then as you look across your portfolio and look at the schedule of expirations that are coming up now, are there other retailers that you are having similar discussions with to provide rent relief or sort of portfolio leasing deals like this. do you expect that there will be other deals like this going forward in the near term?

We are always doing portfolio renewals with retailers. That's really the way it’s evolved and it doesn’t if they are healthy or unhealthy. As we look and we will get together as a retailer will look at the ’13 or the ’14 renewals at this time and work on them as a portfolio and there is always back and forth with them in those negotiations.

And then regarding the Sears boxes that you required in the quarter, I was just wondering if you can give us a sense for how much additional capital you might expect to spend on redeveloping those and what kind of returns you are targeting?

We are not, like we said, we are not in a position right now to give the total spend for those. we should be as the year goes on in the next months, our goal is to be in the position to start construction in spring of ’14 and roll these out in ’14 that’s depends on the timing of leasing which we’ve been making good progress on but we need to get to a certain point before we can start and so the returns though are standalone, they'll will be consistent with our other redevelopment returns, I will say the budgets will be more significant than most of our redevelopments because we’re going to be taking those buildings and splitting them up into shops and restaurants and small boxes. So it’s not like we’re going to replace them with any big box or any other anchor, so that will involve more capital than we’ve typically spent on redevelopment because it’s just more significant redevelopment and we’re looking at these as a way to really upgrade the quality of the retailers, the malls, there’s significant opportunities in both Fayette and CoolSpring are close to 100% lease, so we don’t have any capacity and it’s really a game changer opportunity for us in both of these situations to upgrade these properties and create value.

Okay thanks and just last question on guidance, just two quick things on guidance, I was wondering first, is there anything baked in the guidance for the depositions that you’re talking about and then second I just wanted to clarify the guidance that you’ve maintained, so the 218 to 226 that would correspond to the $0.51 that you did in the quarter, so $0.53, the first quarter $0.51 in the second quarter versus that 55 adjusted, is that right?

Hi, Todd, the guidance doesn’t include any sales. We will update the guidance next quarter when if the sales come to fruition and it’s as adjusted, our guidance takes out the gain on sale and also takes out the impairment as noted in our earning release.

Okay so that would be the $0.55 then in order.

That’s correct.

Our next question comes from the line of Nathan Isbee with Stifel. Please proceed.

Just focusing back on the store NOI numbers, the leasing spreads are up, occupancy is up, bad debt is down, why would you say that it’s not flowing than it seems to a growth and you did reference it going up at the second half of the year and what type of growth should we expect as we head in to the second half of the year?

I mean I think we’re right in the range of what we’ve provided as guidance, we set for the year would be 1% to 3%, we were 1.8% this quarter, 1% in the first quarter, we’re with the factors that you pointed out looking to strengthen in the latter part of the year and so we’re not really seeing any questions about why the NOI growth isn't any higher. it reflects a lot of the new leasing and when we signed the leases that’s when report to spreads but the stores haven’t all opened, so those are going to come online as the year goes on and so we’ll see the benefits from then later this year even going into last year redevelopments as they kick in, and the expansions and we’ll see that as the year progress, so I think the biggest thing is just the lag factor from when leases get signed and when the stores open and we start seeing more of a tangible benefit in same center NOI.

But if you just focus on a mall portfolio along, you did 1.2% and then the good leasing news is not started this quarter, it’s like you’ve pointed that earlier it’s been going on for since last year so that lag effect should be catching up at this point, I would think?

Yes but the other thing is occupancy as like we talk the first quarter was flat, so we didn’t really pickup any there and the stores that were opening this quarter are opening - we’re not really seeing any impact of that from last of the quarter, so just think it’s still there and it shows up in our NOI growth.

Okay and then just focusing on the Sears transaction, can you talk a little about how that came about, did you go to them with a larger list and they came back with those two and what would you say differentiated those two that they were willing to part with them given that they have not been what I would call a large seller to date?

Sure well, I’d say that we talked to Sears all the time and we really focused in on those two because of the redevelopment opportunity that we saw and we felt like two of top five malls that we were getting significant demand from quality retailers that we wanted to be able to accommodate but we have had conversations with Sears about other situations and we are doing other things with them that will facilitate redevelopment, we've talked to them about a whole range of possibilities, subleasing part of their space, taking one floor to a two level store and then buying the stores and Sears has move slow and they want to try to do the right thing over time for their company and in these situations the timing works for them and it works for us.

And I am not sure if I missed this earlier, can you give us status update on the Gulf Coast Town Center?

Yes, I will Nate. On Gulf Coast Town Center we are working with the special servicer and in time we will give you more information but at the moment we are working on try to stabilize the center as well as work with the lender on a potential restructure so that’s will be the status and I really can’t share a whole lot of information because it is sensitive, but suffice to say that we are hopeful that we can work this out.

Our next question comes from the line of Michael Mueller with JPMorgan. Please proceed.

Couple of things, first of all going back to the renewal leasing spreads, 5% to 6% cash increased this quarter that was all better than prior quarters if we are looking forward to the balance of 2013, 2014, when do you see that continuing to increase directionally towards the double digit levels?

That’s our goal and we said we want to be double digit for overall spreads so for the quarter we exceeded that goal and we just want to keep raising the bar and that’s only when we get the double digits for the renewal spreads and we think it’s realistic because we have some sales increases over the past few years that are going to be embedded with negotiation, our occupancy cost is still low and with the level of occupancy overall the supply-demand dynamic being favorable to us we think we have got good momentum and tailwind at our back.

Okay, is there anything that you can give us in terms of the Sears boxes, in terms of rough dollars paid either in aggregate or just an aggregate I guess?

No, we really can’t, Sears didn't want to disclose that and so we honor that request.

Okay and in terms of bond pricing I mean if you would come to market today, what do you think is a rough level that you could price a bond, a 10 year bond at, I apologize if you went over that I may missed it.

No, we didn’t mention the pricing on the bonds, if you look at the most recent executions on realty income and some others that have occurred that will give you an indication of where the pricing may be but it all depends on whether the treasury is going. The treasury has sort of moved up and down a little bit but the spreads are ranging somewhere in the 200 basis points range so you can impute that.

Okay so in terms of the basis points do you think you will get?

Well that’s the range that you know reality income traded at 205 and some of the others are trading in the 200 basis point range, so that’s sort of proxy.

Got it and then last question from me, the China investment, do you still have an investment in China or do you just have an investment China still?

We do, we have a remaining value for, little over $5 million on our book, so we do have that investment in China continuing and we hope to recover that later on, that’s our written down value.

Okay and what exactly was that in again if you could refresh us?

These are Décor Malls in China, there is a portfolio of malls that (inaudible) owns and we are part of the owner of the portfolio and it’s sort of like Home Depot type malls. They have small shops for different merchandises that for example if someone is building their apartment and they want to furnish it so they will go over there and buy the plumbing, they will buy their kitchen materials and things like that to furnish the apartments so that they are their homes, that’s the type of Décor Malls, malls we have invested in.

Our next question comes from the line of Rich Moore with RBC Capital Markets. Please proceed.

I just wanted to make sure I understand what’s happening here, as of the end of the quarter where we were at the end of the quarter we do $400 million term loan and clear some of the line, is that right, is that how that started?

That's correct Rich.

And then I assume, the roughly $400 million of Westfield Preferred back on the line, when those come due then take those out with a bond of 400 million?

Yes you got it.

So do we end up with really $400 of additional debt at that point? I am curious.

So we have say availability of $1 billion, and then we'll pay off the Westfield Preferred $400 million so the debt goes down, (inaudible) the debt goes up. And then we will do the bond issuance and then we'll take that bond and put it down again.

Right I mean if I think of the preferred as equity as oppose to debt I think you got $400 million more debt than you had at the end of the quarter. And I am wondering A, how that sits with the rating agencies, you now that you guys have an investment grade ratings. And B, if that's what you really are going to do, or if you are going to go from the end of the quarter and keep it leveraged, neutral and I guess issue $400 million of equity to take out the $400 million of preferred.

So Rich we already issued $209 million under ATM, new issue, new equity issue. So we have another $100 million left to go. And then we also have targeted some dispositions. So with all the cash that we should generate that should keep us leveraged neutral.

But from the end of the quarter I guess I am wondering parts on it, the 209 million was in Q2, the equity issuance?

Right, that's correct.

So if I go from the end of the quarter, if I am looking at your metrics, I think I have got roughly 400 million more debt, minus little bit of cash and of course if you guys make some asset sales, the equity from the asset sales. But it sounds like you debt metrics will soften to some extent, at least some of them will not get (inaudible) but some of them will soften in the third quarter.

Are you comparing, if you take us from the end of the year our debt is down by $107 million. So at the end of the quarter from quarter we have $5.3 billion today. So if we have more equity issuance and also have some sales that should neutralize us, because we use the $400 million to borrow, to pay and then we'll rise. So if you go back from 2012 the end of 2012 we should be debt neutral.

I guess I was from the end of 2Q13, so I see what you are saying. And so really you will just put those preferred on the line. And then take them out with bonds to get some of your capacity back.

Right. And also not to forget that we will convert some of the floating rates debt to fixed rate debt. So that's our goal, you know right now floating rate debt is a little bit higher and we would like to bring that down by the issuance of bonds.

I mean do you feel good that you can go out and make acquisitions at this point that the balance sheet has the capacity to do some acquisitions with all this stuff you have going on? And if you do what do you think about what's out there at the moment in terms product and pricing?

Sure Rich well the reality is there is not a lot out there that fits the criteria that we're looking for, which is generally mall similar to what we bought last year, Kirkwood, sales good, good NOI growth, they type of criteria. So there is really not a lot of product, if we saw the opportunity then we definitely feel like we could accommodate it, it's a property, it depends on who the owner is. And in the past we use units or other internally generated equity is awaited to fund acquisitions, so depending on the opportunity that's a possibility. And we have the ATM in place, so if we saw the right opportunity we could access that to do it leverage neutral. Or there is a lot of joint venture capital in private equity that's looking to get into the mall business. So I don't think the funding would be the problem. The challenge is more finding the right opportunity.

And I guess the last thing guys is, Penny's has had a bit of a tough week. I am curious what you guys are thinking about what you see in terms of the stores and. Just from your point of view, how they are doing not so much from financials, but just from what you see as you how they are fair at this point?

That report came out yesterday was completely inaccurate, so I think it's, I don't what Penny stock is on today? But that was unfortunate and really unfair to them. And I would say we're very pleased with what we're seeing out of Penny, their stores look great, as a result of the new shops and the investments that they made. And they're advertising is something we really like for back-to-school. We’re seeing better traffic, more shoppers with JC Penny bags in the malls, so we’re encouraged, doesn’t mean that they don’t still have a ways to go to recover from the past 18 months. But, we feel positive in general about them.

Our next question comes from the line of Quentin Velleley with Citi. Please proceed.

It’s Michael Bilerman here with Quentin. Just wanted to come back to sort of capital sources and uses, so you did tapped the ATM, first half of the year Katie you mentioned the fact that you did it prior to the May decline. So your average price in the quarter was 26, year-to-date your average price is 25. I think, you talked about how give where you’re going to be sensitive to where the stock is. So clearly at these levels doesn’t appear to be that you would be interest that the hurdle rate would be at least back to where the stock was for that remaining 100 million on the ATM. Is that the way we should be thinking about it?

I think those are range that we work within Michael. We actually executed in the first quarter a little closer to 23s something with high 23s in the second quarter our average is 25, low 25. So we have executed it a little bit lower of the stock price than you mentioned but it’s all about value and opportunities that we see and how we can use that capital. So we’ll be cautious with how we execute. We want to minimize dilution and we definitely want to get the best value for our stock that we issue. So, it all goes into the formula.

Why are you guys being so cagy on just the volume of potential asset sales, right? You have a $10 billion portfolio. Why can’t you just say, look our idea here is to sell $300 million of assets, we may put more on the market to reach that goal. But, what we’re targeting in asset sales versus what we have in the market and our anticipated hit rate, we can sell $150 million to $200 million. Why not give a little bit more confidence and clarity to the street?

There is different approaches, different companies take. some companies go right upfront say we’re listing these malls and these are roughly the values and take the approach that you’re recommending. And we just haven’t been comfortable doing that and we’d rather wait when we have certainty as far as deal execution, because our experience with dispositions like Katie says, it’s very cycle. And you can have $200 million seed up and then something happens in the market and buyers go away. So we don’t see any reason really to get ahead of ourselves. Our guidance doesn’t include any dispositions. So we announce things, we’ll put it out there and make the adjustments to the numbers. But it’s just philosophical in which you’re comfortable with and in which you’re not, and this is just the approach that we choose to take whether it’s right or wrong.

I mean, I can understand there are two ends to the spectrum and the spectrum of naming names and individual assets and prices clearly is a very aggressive approach. But you are sort of at the other end of the spectrum without any color whatsoever, right. So I’m not asking the name names, I’m asking for individual values. But I do think that it would be helpful because at some point you do need to de-lever and this is part of the deleveraging exercise and the market clearly is concerned that you’re just going to float the market with equity even though you have been disciplined but the people view more on perception than reality. So trying to get more comfort as to, look we’re in the market with handful of malls, over to our office buildings or sort of community centers. So at least get people some semblance of what’s being targeted, I think some direction would be helpful. And clearly with the questions on this call, it seems that that’s the narrative.

Yes, those are good points, and we appreciate your input. And, we definitely listen to investors and people with a lot of credibility in the market like you, so we appreciate the feedback. And, what we said is that we are going to stay leveraged neutral through a combination of sources, the ATM, joint ventures and dispositions and with the $400 million plus of Westfield Preferred coming up, that’s something that we know we need to replace and between the 240, we’ve done year-to-date and the other dispositions and the availability under our ATM, we’re confident that we’re going to be able to achieve that. And the rating agencies have been very comfortable with the projections that we’ve given them, and they’ve gone through in detail. So, hopefully that gives everyone else some comfort.

And just thinking about the targeted unsecured bond, I assume you’re, because there is debut issuance we should be thinking about a 10 year deal, you’re not going to do like a five or seven…

You’re right, we’ll be targeting a 10 year bond and we think that’s where the best execution will occur.

And then from I guess again sources and uses, then you will pay off the Westfield Preferreds with this new term loan that you got and drawing on some of your existing mines which have well over 500 million of capacity. You will issue the bond at the end of the year will that go directly to repay this $400 million term loan or would you access some of your later maturity term loans? Do you view this term loan as being the short term measure to getting instant bond effectively?

What we will do when we issue the bonds we'll pay down the lines of credits and then the lines of credit is what gives us the flexibility to pay off the loans as they come to you. And I just also want to remind everyone that we have been investing in a lot of development and expansions and they have been from cash so our asset base is growing as well. so it’s not just you may see the debt balance not coming down as much but you have to realize we are investing a lot of cash in our expansions and developments and that just improves our asset base and our unencumbered pool.

Is any of the credit facilities, do you have any hedges or swaps on that floating rate or should we think about once you start fixing of 400 million of debt effectively from as we think about 2014 FFO put aside the sales for a second and potential equity we should think about effectively debt coming in at 47 replacing existing debt call it 1.5% to 2%, correct?

That’s correct the goal is to replace the floating rate debt with the long term. Now if you go back and look at all the debt that we have been paying off they have been well over 5%. So and the loans that are coming up are also well over 5% so technically what we are doing is replacing the long term rate, the higher 5% rate that bond issuance. But if you blend our short term and long term, we should continue to bring that weighted average interest rate down.

And just a last question from me, just on the (inaudible) relationship is as Wolstein sort of is ramping up that entity, can you talk a little bit about what's been going on with the centers and will that grow or you view that sort of once they are unable to build up their own platform that things will transition over?

Yes things are going to transition over. their goal has always been to build up their platform and get critical mass so they can execute on their own and our contract was originally two years which would bring us we are roughly a year into it now and we don’t anticipate it going any longer beyond that and it could even be a little bit shorter depending on their pace of acquisitions.

There is buyer for more assets you see that so we don’t know maybe we are going to sell a $1 billion of assets versus 200 another reason to put out more disclosure. But I will stop there.

You never know.

Our next question comes from the line of Carol Kemple with Hilliard Lyons. Please proceed.

Steve earlier in the call you mentioned I think you all said some of the better or higher quality retailers are starting to open in your malls. can you let us know what some of those retailers?

Sure Carol, well we have had a lot of success working with some really good retailers in terms leasing. some of their names are Oakley, the jewelry category has been really strong we have done a lot with Pandora, Kay and Zales I mentioned who have had a real renaissance. we are dealing a lot with Francesca's, Chico's, White House Black Market, Michael Kors so those are just some of the examples I would say that we are talking about. And the with the redevelopments of the Sears buildings at Coldsprings in (inaudible) it’s opened us up to an even higher end range of retailers that we are in discussions with and we look forward to announcing those as well.

And then regarding the Citadel mall in Charleston what kind of happened to that centers, did the town demographics change or why is it with the special servicer now, where is the struggle?

Just in terms of the asset Charleston has a lot of retail and Citadel was in an areas that had counted on some growth that really didn’t materialize. there is just too much competition in the market and given the loan balance on the property there is just too much financing in place. So it’s a combination of where the debt balance stands and just the property not performing to the expectations.

Our next question comes from the line of Ben Yang with Evercore. Please proceed.

Just another questions on guidance the 1% to 3% same store NOI. obviously that is for the total portfolio not just for malls but it sounds like Stephen based on some of your earlier comments you compared the 1.8% result which excludes that bankruptcy income to the 1% to 3% poor cash to basically and for that you’re meeting expectations, so just to be clear does that guidance exclude the impact of that bankruptcy settlement from last year, so for example maybe the foot noted 1.4% year-over-date result is more comfortable to the 1% to 3% and maybe not the 1% that’s including that income and maybe our interpretation should be that you’re indeed within budget and maybe tracking toward that’s low end of guidance, well confusing but do you understand kind of what I’m asking now?

Yes, Ben, if you look at the lower end of the guidance that when include that $1.5 million but if you exclude that would be in the middle of the guidance.

I know but what does guidance include? does that include it or does that exclude? I’m just trying to figure out whether you’re truly meeting kind of your budget or if you’re kind of tracking towards that low end of your budget?

We’ve excluded least termination fees in our guidance and when we announce this recapture, the bankruptcy last year which we pointed out in our call, we pointed out that it was a kind of the special item, so that’s why we felt like it was appropriate to go ahead and pull that out basically when we’re figuring our same center NOI and reporting that for the quarter. Over the course of the full year when you factor in the magnitude of the NOI it’ll become less material, in the one quarter it makes a difference but it shouldn’t make that big of difference in our full year results as we go on because the denominator is bigger.

And just final question, you’ve mentioned the impairment on Citadel, and giving your previous comment that you intend to sell obviously some more malls, have you gone through the impairment check recently for all the malls that you plan to sell or can we expect that maybe we can see some additional impairments as you move through that disposition process?

Yes, Ben, I’ll try and answer that question for you. We, every quarter go through an impairment analysis for all our properties not just the ones that we might be considering disposing, so based on assumptions that go into the impairment analysis, that’s what determines what assets are impaired, it’s the probability of those inputs, so in the case for example for Citadel mall our input for a potential return to the lender was much greater, so based on that analysis based on that probability you created an impairment, so we go through the same analysis and if the probability is high that we would sell and then the undiscounted cash flow against the booked value gives us a result that impair then we would impair it, so as of this quarter Citadel mall is the only asset that had created an impairment.

Our next question comes from the line of Kathleen Burns of Goldman Sachs. Please proceed.

Hi just a quick question on, you’ve mentioned you want to lower your amount of floating rate debt, do you have an idea of share you like the amount of floating rate debt to get to, I think right it’s around 23%?

We don’t really have any specific percentage in mind but obviously we look ahead on the curve and we look to always keep the risk covers, so our goal would be continuously recycle out of the short terms debt to long term but also maintain a balance because it does give us the flexibility on our lines of credit that’s where the floating rate interest rate is.

Our next question is a follow-up question from the line of Quentin Velleley with Citi. Please proceed.

I might have missed this so I, you had a lot of re-tenants in going on in the first quarter, can you talk a little bit about that and did that continue into the second quarter and when is that going to stop following into NOI growth?

Yes, now it’s definitely part of our new leasing results and like I said earlier there is a lag because we report on re-leasing when leases are signed, so then leasing will kick in three to six months even a year down the road, so we’ll see it in the second part of this year and in the next year.

Okay, thank you.

There are no further questions at this time. I would like to turn the call back over Mr. Lebovitz.

Thank you everyone. We appreciate your participation and have a good rest of the summer, bye.