Orleans Homebuilders (OHB) Executes Limited Waiver and Amendment Extension
Orleans Homebuilders, Inc. (AMEX: OHB) announced that today the Company and its lenders have now executed a Limited Waiver and Amendment extension to its $375 million Second Amended and Restated Revolving Credit Loan Agreement dated September 30, 2008, effective immediately. The Temporary Amendment, which effectively extends the maturity of the Credit Facility from December 20, 2009 to January 29, 2010, generally provides, among other things, the Company with the ability, subject to compliance with conditions precedent and covenants, to continue existing amendments to the determination of borrowing base availability as provided in the Third Amendment to the Credit Facility and to immediately permit the extension of letters of credit issued under the Credit Facility to February 26, 2010.
The Company continues to work actively with its bank lending group to obtain a maturity extension to its Credit Facility. On December 8, 2009, the Company announced that it and certain of its lenders had agreed to a non-binding term sheet (the "Term Sheet") relating to a 24-month maturity extension and structural modifications (the "Amendment") of the Credit Facility.
The Amendment will be subject to an affirmative vote by each of the approximately 16 lenders party to the Credit Facility and the Company can offer no assurances that each of the lenders will approve the Amendment or as to the specific terms of the document that may be approved. If the Company does not enter into the Amendment on or before approximately January 29, 2010, the Credit Facility will mature on such date and the Company will not have sufficient funds to repay amounts outstanding or continue normal operations.
The Company currently expects that it and its lenders will enter into the Amendment on or before January 29, 2010, or thereabouts, although the Company can offer no assurance that it will be able to do so. The Company anticipates that without the Amendment: (i) the Credit Facility will otherwise mature on approximately January 29, 2010; (ii) the Company will likely not have sufficient liquidity to continue its normal operations at or before that time; and (iii) without an additional temporary amendment on or before January 15, 2010, the Company will likely experience liquidity problems due to borrowing base limitations or covenant or other defaults under the Credit Facility on or before January 15, 2010. In addition, in the event that, at any time, beneficiaries of letters of credit draw under outstanding letters of credit, any draw will have an adverse effect on the Company's ability to borrow under the Credit Facility and draws of any significant amount of letters of credit will materially adversely affect the Company's liquidity to continue its operations.
The Company continues to work actively with its bank lending group to obtain a maturity extension to its Credit Facility. On December 8, 2009, the Company announced that it and certain of its lenders had agreed to a non-binding term sheet (the "Term Sheet") relating to a 24-month maturity extension and structural modifications (the "Amendment") of the Credit Facility.
The Amendment will be subject to an affirmative vote by each of the approximately 16 lenders party to the Credit Facility and the Company can offer no assurances that each of the lenders will approve the Amendment or as to the specific terms of the document that may be approved. If the Company does not enter into the Amendment on or before approximately January 29, 2010, the Credit Facility will mature on such date and the Company will not have sufficient funds to repay amounts outstanding or continue normal operations.
The Company currently expects that it and its lenders will enter into the Amendment on or before January 29, 2010, or thereabouts, although the Company can offer no assurance that it will be able to do so. The Company anticipates that without the Amendment: (i) the Credit Facility will otherwise mature on approximately January 29, 2010; (ii) the Company will likely not have sufficient liquidity to continue its normal operations at or before that time; and (iii) without an additional temporary amendment on or before January 15, 2010, the Company will likely experience liquidity problems due to borrowing base limitations or covenant or other defaults under the Credit Facility on or before January 15, 2010. In addition, in the event that, at any time, beneficiaries of letters of credit draw under outstanding letters of credit, any draw will have an adverse effect on the Company's ability to borrow under the Credit Facility and draws of any significant amount of letters of credit will materially adversely affect the Company's liquidity to continue its operations.
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