As an early Christmas present to a home builder, Wachovia Bank has finalized the deal to restructure $22.2 million of Comstock Homebuilding Cos.' outstanding borrowing base by distributing it across three new loan facilities.
"Now that this deal is closed, we once again have a source of financing for construction of sold homes, which we believe will have a positive impact on results in 2009," said Christopher Clemente, Comstock's chairman and CEO, in a statement released by the company Dec. 23. "Although financial market turmoil continues to have a destabilizing effect on housing, we are committed to surviving this cyclical downturn and restoring Comstock to profitability. Accordingly, we continue to make the hard decisions that we believe are necessary to ensure our ability to accomplish our goal. To that end, we are reducing salaries for 2009 at the top of our organization by as much as 20%, and we will continue to make hard decisions as warranted given market conditions."
The new loan facilities--an $8 million construction revolver, a $11.6 million term loan, and a $3 million project loan--refinance a total of 653 lots the company holds.
This is the fourth restructuring deal Comstock has made in 2008.
An agreement with Bank of America was made Dec. 1 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 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 foreclosure" deals in the company's Atlanta, Georgia, 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.