Comstock Homebuilding (CHCI) Surges On Loan AGreement with Guggenheim
CHCI Hot Sheet
EPS Growth %: -20.0%
Shares of Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) have rocketed 38% higher after the company announced they have entered into a loan amendment with Guggenheim Corporate Funding, LLC. The loan amendment modifies an existing forbearance arrangement related to $12.1 million of outstanding principal under Comstock's secured Penderbrook project loan.
The key terms of the modification increase the cash flow available to Comstock through reduced principal payments to Guggenheim as units are settled. The modification will provide Comstock with cash equal to 25% of the net sales price of certain units settled on or after July 16, 2009. This cash will be used by Comstock for working capital. The modification also allows for continued accelerated unit releases provided Comstock satisfies certain conditions subsequent; including meeting cumulative minimum sales requirement of three (3) units per month, ten (10) units per quarter and satisfying certain other conditions with respect to the remainder of Comstock's outstanding indebtedness (the "Modification Covenants"). If Comstock is unable to meet the Modification Covenants, it will not result in an event of default but may result in a reversion to the unit release provisions to ten percent (10%) of the net sales price of sold units in accordance with the existing loan documents.
The key terms of the modification increase the cash flow available to Comstock through reduced principal payments to Guggenheim as units are settled. The modification will provide Comstock with cash equal to 25% of the net sales price of certain units settled on or after July 16, 2009. This cash will be used by Comstock for working capital. The modification also allows for continued accelerated unit releases provided Comstock satisfies certain conditions subsequent; including meeting cumulative minimum sales requirement of three (3) units per month, ten (10) units per quarter and satisfying certain other conditions with respect to the remainder of Comstock's outstanding indebtedness (the "Modification Covenants"). If Comstock is unable to meet the Modification Covenants, it will not result in an event of default but may result in a reversion to the unit release provisions to ten percent (10%) of the net sales price of sold units in accordance with the existing loan documents.
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