FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

Restrictive covenants in our indebtedness may limit management’s discretion with respect to certain businessmatters.Instruments governing any of our indebtedness or indebtedness of our operating entities or theirsubsidiaries may contain restrictive covenants limiting our discretion with respect to certain business matters.These covenants could place significant restrictions on, among other things, our ability to create liens or otherencumbrances, to make distributions to our unitholders or make certain other payments, investments, loans andguarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. Thesecovenants could also require us to meet certain financial ratios and financial condition tests. A failure to complywith any such covenants could result in a default which, if not cured or waived, could permit acceleration of therelevant indebtedness.If we are unable to manage our interest rate risk effectively, our cash flows and operating results may suffer.Advances under credit facilities and certain property-level mortgage debt bear interest at a variable rate.We may incur further indebtedness in the future that also bears interest at a variable rate or we may be requiredto refinance our debt at higher rates. In addition, though we attempt to manage interest rate risk, there can be noassurance that we will hedge such exposure effectively or at all in the future. Accordingly, increases in interestrates above that which we anticipate based upon historical trends would adversely affect our cash flows.We face potential adverse effects from tenant defaults, bankruptcies or insolvencies.A commercial tenant may experience a downturn in its business, which could cause the loss of that tenantor weaken its financial condition and result in the tenant’s inability to make rental payments when due or, forretail tenants, a reduction in percentage rent payable. If a tenant defaults, we may experience delays and incurcosts in enforcing our rights as landlord and protecting our investments.We cannot evict a tenant solely because of its bankruptcy. In addition, in certain jurisdictions where weown properties, a court may authorize a tenant to reject and terminate its lease. In such a case, our claim againstthe tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than theremaining rent owed under the lease. In any event, it is unlikely that a bankrupt or insolvent tenant will pay thefull amount it owes under a lease. The loss of rental payments from tenants and costs of re-leasing wouldadversely affect our cash flows and results of operations. In the case of our retail properties, the bankruptcy orinsolvency of an anchor tenant or tenant with stores at many of our properties would cause us to suffer lowerrevenues and operational difficulties, including difficulties leasing the remainder of the property. Significantexpenses associated with each property, such as mortgage payments, real estate taxes and maintenance costs, aregenerally not reduced when circumstances cause a reduction in income from the property. In the event of asignificant number of lease defaults and/or tenant bankruptcies, our cash flows may not be sufficient to pay cashdistributions to our unitholders and repay maturing debt or other obligations.Reliance on significant tenants could adversely affect our results of operations.Many of our properties are occupied by one or more significant tenants and, therefore, our revenues fromthose properties will be materially dependent on the creditworthiness and financial stability of those tenants. Ourbusiness would be adversely affected if any of those tenants failed to renew certain of their significant leases,became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely fashion or at all. In the eventof a default by one or more significant tenants, we may experience delays in enforcing our rights as landlord andmay incur substantial costs in protecting our investment and re-leasing the property. If a lease of a significanttenant is terminated, it may be difficult, costly and time consuming to attract new tenants and lease the propertyfor the rent previously received.12