Comstock Homebuilding Cos. announced Monday, Dec. 1 that it had worked out yet another agreement with a bank to restructure loans, allowing the company to stay afloat.
An agreement with Bank of America was reached to restructure $8.8 million of debt; the builder also agreed to cooperate with the bank in regards to foreclosures on three of its Atlanta real estate projects. In return, Bank of America agreed to release Comstock from the $5.7 million of secured obligations associated with the 10-year extended maturity date for $3.1 million under the company's unsecured revolving line of credit note to Dec. 28, 2018. The amendment will not accrue interest until Jan. 28, 2010, at which time Comstock will be obligated to commence making monthly interest-only payments until Jan. 28, 2012. The company will then be obligated to make monthly principal and interest payments through the note's maturity. There are no financial covenants under the amended unsecured loan.
In September, Comstock worked arrangements with Regions Bank and Branch Banking and Trust Co., eliminating $5.3 million and $32.7 million of debt respectively. Both of the arrangements also called for "friendly foreclosures" in the company's Atlanta, Ga., and Virginia markets. Prior to these two deals, Comstock entered into a new $40 million loan and restructuring deal of its $30 million senior unsecured notes with Key Bank National Association in March, providing Comstock with a $15 million discount to the principal, adding to the company's working capital.
"The market continues to be challenging with no immediate visibility to recovery," Comstock CEO Christopher Clemente said in a statement. "Our primary focus is completing the restructure of our loans so that we can position Comstock to survive this downturn and prosper in the coming recovery."
As of end of its third quarter, Comstock reported $117.4 million in outstanding debt--a $35.6 million reduction since June and a $53.8 million reduction since December 2007. Cash on hand as of September was $10.1 million with $6.3 million of unrestricted cash. The company's adjusted net debt-to-cap ratio for the third quarter was 70.2%, adjusted for the $40 million of accrued interest.