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World Market Center said to default on $217.4 million loan

Fitch Ratings reported Tuesday that the World Market Center in Las Vegas has defaulted on a $217.4 million loan, contributing to a 7.4 percent rise in special servicing of delinquent commercial mortgage-backed securities.

World Market Center President and CEO Bob Maricich denied the report late Tuesday.

“We are absolutely not in default,” Maricich said. “That’s totally inaccurate. The way Fitch reported it is not accurate.”

The World Market Center is part of a loan pool with a special servicer, and Maricich said it’s possible that a member of that pool is late on a loan.

The loan was transferred to special servicing because of the borrowers’ inability to fund operating shortfalls at the 1.1 million-square-foot furniture showroom.

After a 54 basis point increase in Fitch’s CMBS Loan Delinquency Index to 3.86, the balance of special service loans in Fitch-rated transactions increased to $35 billion in September from $32.6 billion in August.

The World Market Center was developed at a cost of about $1 billion on about 54 acres on Grand Central Parkway in downtown Las Vegas, with three major buildings opening in phases from 2005 to 2008. The last building was constructed at a cost of $550 million.

US Airways to delay delivery of Airbus jets until at least ’13

US Airways will delay delivery of 54 new Airbus jets until at least 2013 and take other steps to boost its cash reserves until travel demand rebounds.

The airline said Tuesday that putting off the deliveries will cut aircraft spending by $2.5 billion over the next three years.

A new $95 million loan plus other financial moves will boost its available cash by about $150 million this year and by $450 million by the end of 2010, CEO Doug Parker said in a message to employees. In recent months, some analysts had speculated that US Airways could face a financial crisis as it burned through cash this winter, a slower period for travel. Last month, the company announced it will cut 1,000 jobs, drop several international routes and concentrate nearly all U.S. flying at three hub airports and Washington.

The airline said last month it would cut 1,000 jobs as it shuts crew bases in Boston, New York and Las Vegas to focus on its hubs in Philadelphia, Phoenix and Charlotte, N.C., and its base at Washington’s Reagan National Airport.


Barnes & Noble, Borders post losses during quarter

Barnes & Noble Inc. and Borders Group Inc., the nation’s two largest brick-and-mortar book sellers, both posted quarterly losses Thursday and forecast a difficult holiday season, saying competition from discount chains and online retailers is stiffening.

Barnes & Noble, the larger of the two, also cut its forecast for annual profit, and shares of both retailers fell.

Even with online presence, traditional bookstores have had a rough time facing off against online sellers like Amazon.com and discount stores including Wal-Mart Stores and Target and cope with consumers cutting discretionary purchases amid tough economic times.

Barnes & Noble’s second-quarter loss totaled $24 million, or 43 cents per share, in the three months ended Oct. 31, compared with a loss of $16 million, or 34 cents per share, a year earlier. Excluding costs related to buying its college bookstore unit from its chairman, the loss totaled 30 cents per share.

Revenue rose 4.5 percent to $1.16 billion from $1.11 billion.

Borders, meanwhile, lost $38.5 million, or 64 cents per share, in the three months ended Oct. 31, compared with a loss of $172.2 million, or $2.85 per share, a year earlier.

Revenue fell 13.1 percent to $602.5 million from $693.4 million.


Saab in jeopardy after deal by GM to sell brand falters

A deal for General Motors Co. to sell Saab to a specialty carmaker has collapsed, leaving the storied Swedish brand born from jets in 1947 close to extinction.

Koenigsegg Group AB, a consortium formed by Swedish luxury sports car maker Koenigsegg Automotive AB, said Tuesday it pulled out of the deal partly because it couldn’t agree with investors on how best to move the brand from mass-market to premium.

For GM, it was the third time this year that a deal to shed one of its brands collapsed. The next move is up to GM’s board, which will decide Saab’s future in a few days.

But with no apparent backup investors and the Swedish government refusing to buy Saab, GM may follow through on a contingency plan to let the brand die. That jeopardizes the jobs of Saab’s 4,500 employees, mostly in Sweden.

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