Orleans Homebuilders Announces First Amendment to Second Amended Credit Agreement
11 Fevereiro 2009 - 4:42PM
PR Newswire (US)
BENSALEM, Pa., Feb. 11 /PRNewswire-FirstCall/ -- Orleans
Homebuilders, Inc. (AMEX:OHB) announced today that it and its
lenders have entered into the First Amendment to its Second Amended
and Restated Credit Loan Agreement and First Amendment to Security
Agreement (the "Amendment"), effective immediately. Among other
things, the Amendment immediately improves the borrowing base
availability calculation by decreasing certain borrowing base
category limitations. Jeffrey P. Orleans, Chairman of the Board and
Chief Executive Officer stated, "With the help of our lending
group, we have secured this important bank amendment, which will
provide us with added liquidity and flexibility to manage in these
difficult times. It is a challenging environment, but we have made
good progress on our stated objectives, and we have a strong and
experienced team that is managing through it." As part of the
Amendment, the Company reduced the amount of the credit facility by
approximately 8%, from $440 million to $405 million, subject to
availability determinations and other limitations described below.
The Amendment provides for additional borrowing base liquidity by
amending certain category limitations for spec inventory and model
homes, as well as for land under development, within the
calculation of borrowing base availability. These changes
immediately enhance the borrowing base liquidity of the Company.
Certain financial covenants were modified, including reductions in
minimum consolidated tangible net worth, cash flow from operations,
minimum liquidity, and maximum cash covenants. The interest rate
was increased by 25 basis points to LIBOR plus 5.25%. The Amendment
also includes certain other terms, modifications and definitional
adjustments, which are set forth in the final documentation. The
amendment includes the following changes: -- The amount of the
credit facility was reduced by approximately 8%, from $440 million
to $405 million. The amount of the revolving credit facility will
be further reduced to $375 million beginning July 16, 2009 and
through maturity. The letter of credit sublimit was reduced from
$60 million to $30 million. The amount available under the credit
facility remains subject to borrowing base availability
requirements. -- The existing category limitations applicable to
the determination of the net borrowing base availability were
adjusted so that the maximum borrowing base availability
attributable to work-in-progress inventory not subject to a
qualifying agreement of sale (i.e., spec inventory and model home
inventory) was increased from 45% to 58% of total work-in-process
inventory including backlog units; this change applies to all
borrowing base certificates delivered before July 31, 2009. In
addition, maximum borrowing base availability attributable to land
under development was increased from 55% to 65% of total borrowing
base availability for all borrowing base certificates delivered
before July 31, 2009, but generally subject to a maximum of $235
million. Garry P. Herdler, Executive Vice President and Chief
Financial Officer, stated, "The amendment significantly improves
the Company's liquidity through the reduction of borrowing base
category limitations, and it provides for immediate increased
flexibility. We believe that this amendment is positive for both
the Company and the lending group, and we appreciate the continued
support of our lenders." The summary of certain terms of the
Amendment in this press release is a summary of the final
Amendment. The Company intends to file the executed Amendment
promptly with the Securities and Exchange Commission. About Orleans
Homebuilders, Inc. Orleans Homebuilders, Inc. is a residential
homebuilder with operations in Southeastern Pennsylvania; Central
and Southern New Jersey; Orange County, New York; Charlotte,
Raleigh and Greensboro, North Carolina; Richmond and Tidewater,
Virginia; Chicago, Illinois; and Orlando, Florida. The Company's
Charlotte, North Carolina operations also include adjacent counties
in South Carolina. Forward-Looking Statements Certain information
included herein and in other Company statements, reports and SEC
filings is forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements concerning anticipated liquidity and
flexibility to operate and manage the Company's business,
improvements to liquidity, revenues, sales, operating results,
financial resources, pace of sales, industry outlook, economic
conditions, future impairment charges, future tax valuation
allowance, anticipated tax refunds, anticipated debt repayment,
anticipated use of proceeds from transactions, reductions in land
expenditures, the Company's ability to meet its internal financial
objectives, including debt reduction objectives, the impact of
recent transactions on the Company's liquidity, capital structure
and finances, and the Company's response to market conditions. Such
forward-looking information involves important risks and
uncertainties that could significantly affect actual results and
cause them to differ materially from expectations expressed herein
and in other Company statements, reports and SEC filings. For
example, there can be no assurance that the Company will be able to
adjust successfully to current market conditions. These risks and
uncertainties include local, regional and national economic
conditions, the effects of governmental regulation, the competitive
environment in which the Company operates, fluctuations in interest
rates, changes in home prices, the availability and cost of land
for future growth, the availability of capital, the availability
and cost of labor and materials, our dependence on certain key
employees and weather conditions. Additional information concerning
factors the Company believes could cause its actual results to
differ materially from expected results is contained in Item 1A of
the Company's Annual Report on Form 10-K/A for the fiscal year
ended June 30, 2008 and Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2008 filed with the SEC.
http://www.orleanshomes.com/ DATASOURCE: Orleans Homebuilders, Inc.
CONTACT: Garry P. Herdler - Executive Vice President & Chief
Financial Officer of Orleans Homebuilders, Inc., +1-215-245-7500
Web Site: http://www.orleanshomes.com/
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