American Dream, the $5 billion mall and entertainment complex in New Jersey’s Meadowlands, failed to make an interest payment that was due Monday on municipal bonds sold to help finance the venture, Bloomberg News reported. The more than 3 million-square-foot destination mall, which features an indoor ski slope, amusement park and water park, did not make an $8.8 million payment that was due, according to a regulatory filing. “The trustee has not received any revenues for payment of the August 1 debt service, and the reserve account does not have sufficient funds to make such payment,” the filing said. About $290 million of muni debt issued for American Dream is backed by New Jersey economic development grants based on sales-tax collections. As of early July, New Jersey’s Economic Development Authority hadn’t approved documents certifying project expenditures by the developer Triple Five Group. Those documents are needed to release the grants. Failure to make a payment on the so-called grant-revenue bonds doesn’t constitute a default nor does it require the borrower to pay back the loan immediately, according to bond documents. Bonds maturing in 2027 with a 6.25% coupon traded at about 91 cents on the dollar June 30, while debt with a 6.75% coupon maturing in 2031 traded at about 82.4 cents.
