Orleans Homebuilders (OHB) Announces Amendments to Restated Revolving Credit Loan Agreement
Orleans Homebuilders, Inc. (Amex: OHB) and its lenders entered into the Second Amended and Restated Revolving Credit Loan Agreement which provides an amendment and modification to the existing revolving credit agreement through December 2009.
The Company reduced the amended credit facility by 25% from $585 million to $440 million, subject to availability determinations and other limitations described below. Covenant modifications were made to the credit facility, including modifications to minimum consolidated tangible net worth, cash flow from operations and minimum liquidity.
The amended credit facility does not limit the acquisition of improved land (i.e., finished lot take-downs and/or controlled rolling lot options) purchased in the normal course of business and consistent with Company projections provided to lenders. The interest rate under the amended facility was changed to LIBOR plus 5.0%, an increase of 100 basis points.
Garry P. Herdler, Executive Vice President and Chief Financial Officer stated, "The amended $440 million revolving credit facility significantly modifies bank covenants for improved flexibility, it also eliminates several covenants, and it improves our borrowing base availability through December 2009. We appreciate the one-year maturity extension from five individual banks that would have otherwise matured in December 2008, which enabled us to reduce the previous $585 million facility size by 25% on a pro rata basis for all lenders. We believe that the amended facility is a positive for our lenders, while it also provides Orleans with the flexibility necessary in today's challenging market."
Orleans Homebuilders, Inc. develops, builds and markets high-quality single-family homes, townhouses and condominiums.[SM]
The Company reduced the amended credit facility by 25% from $585 million to $440 million, subject to availability determinations and other limitations described below. Covenant modifications were made to the credit facility, including modifications to minimum consolidated tangible net worth, cash flow from operations and minimum liquidity.
The amended credit facility does not limit the acquisition of improved land (i.e., finished lot take-downs and/or controlled rolling lot options) purchased in the normal course of business and consistent with Company projections provided to lenders. The interest rate under the amended facility was changed to LIBOR plus 5.0%, an increase of 100 basis points.
Garry P. Herdler, Executive Vice President and Chief Financial Officer stated, "The amended $440 million revolving credit facility significantly modifies bank covenants for improved flexibility, it also eliminates several covenants, and it improves our borrowing base availability through December 2009. We appreciate the one-year maturity extension from five individual banks that would have otherwise matured in December 2008, which enabled us to reduce the previous $585 million facility size by 25% on a pro rata basis for all lenders. We believe that the amended facility is a positive for our lenders, while it also provides Orleans with the flexibility necessary in today's challenging market."
Orleans Homebuilders, Inc. develops, builds and markets high-quality single-family homes, townhouses and condominiums.[SM]
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