This summer’s markets rally hasn’t helped banks and investors who lent about $2.7 billion to build the country’s second-largest mall, near the Meadowlands Sports Complex in New Jersey, the Wall Street Journal reported. The American Dream Mall has been shut since March, and mutual funds that bought municipal bonds backing its construction have since taken hundreds of millions of dollars in paper losses. The troubles highlight the growing disconnect between ailing segments of the U.S. economy and the surge on Wall Street. Even with schools in New Jersey preparing to reopen, American Dream remains closed because of a state order aimed at reducing the spread of the new coronavirus. The longer the hybrid mall and amusement park goes without paying customers, the harder it will be for its owner, Triple Five Group, to repay the money it borrowed from banks and mutual funds in 2017. The price of some of American Dream’s roughly $1 billion of municipal bonds fell to about 87 cents on the dollar in July after Triple Five disclosed that the mall was losing tenants. The bonds had traded around 120 cents before the coronavirus struck the U.S., according to data from Electronic Municipal Market Access. Municipal-bond mutual funds operated by Nuveen, which owned about $600 million face value of American Dream debt this spring, took paper losses of about $196 million on the investment from March through June, according to a Wall Street Journal analysis of fund reports published by Nuveen. Interest payments over the period reduced the net paper loss to $183 million, according to a Nuveen spokeswoman.
