The latest on WCI Communities
WCI Communities is a condominium and single-family home builder that dove headfirst into the residential tower development market here in Florida. Now, it's running into trouble due to plunging condo sales and a wave of contract cancellations and defaults (its tower division reported NEGATIVE-81 net orders in Q3 2007 as cancellations outweighed the few gross orders).
Currently, WCI is in negotiation with its lenders over a $700 million secured, revolving line of credit and a $263 million bank loan. The company announced two days ago that it received another extension from its lenders -- to January 16. It'll be interesting to see what comes out of this process. Here's the latest from AP:
"Shares of WCI Communities Inc. tumbled Wednesday after Standard & Poor's affirmed the ratings of the struggling homebuilder at junk status.
"Shares fell 49 cents, or 15 percent, to $2.70 in midday trading, after hitting a new low of $2.67 earlier in the session. Shares have traded between $3 and $24.20 in the past 12 months.
"In a note to investors, S&P said the Bonita Springs, Fla.-based company needs to negotiate more liberal terms governing a $700 million secured revolving line of credit and a $263 million secured bank loan, or its unsecured debt could be accelerated.
"On Monday, WCI said its secured creditors extended a temporary waiver of performance to Jan. 16. During the extension, WCI hopes to finalize a longer-term amendment that would give it a financial cushion.
"If WCI is not successful, the lenders could potentially foreclose on certain collateral. In that case, WCI said it cannot guarantee it would be able to secure alternate financing, which could hurt the company's ability to maintain sufficient working capital."
UPDATE: WCI shares finished the day down 53%.
Currently, WCI is in negotiation with its lenders over a $700 million secured, revolving line of credit and a $263 million bank loan. The company announced two days ago that it received another extension from its lenders -- to January 16. It'll be interesting to see what comes out of this process. Here's the latest from AP:
"Shares of WCI Communities Inc. tumbled Wednesday after Standard & Poor's affirmed the ratings of the struggling homebuilder at junk status.
"Shares fell 49 cents, or 15 percent, to $2.70 in midday trading, after hitting a new low of $2.67 earlier in the session. Shares have traded between $3 and $24.20 in the past 12 months.
"In a note to investors, S&P said the Bonita Springs, Fla.-based company needs to negotiate more liberal terms governing a $700 million secured revolving line of credit and a $263 million secured bank loan, or its unsecured debt could be accelerated.
"On Monday, WCI said its secured creditors extended a temporary waiver of performance to Jan. 16. During the extension, WCI hopes to finalize a longer-term amendment that would give it a financial cushion.
"If WCI is not successful, the lenders could potentially foreclose on certain collateral. In that case, WCI said it cannot guarantee it would be able to secure alternate financing, which could hurt the company's ability to maintain sufficient working capital."
UPDATE: WCI shares finished the day down 53%.
posted by Mike Larson at
2:42 PM
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