Standard Pacific Corp. said its bankers granted a 45-day waiver of any default arising from non-compliance with financial covenants — meaning the company can stave off a major showdown with creditors until at least May 14.
The troubled Irvine homebuilder’s waiver was originally scheduled to expire March 30. As part of the deal, Standard Pacific said its revolving credit facility was slashed to $700 million from $900 million. The company said it had $90 million in borrowings and $49 million in letters of credit under the revolving credit facility as of March 21.
Standard Pacific also said it had $293 million of cash on hand as of March 21, “substantially in line with its business plan.” That was up from $219 million as of Dec. 31, 2007 and a razor-thin $26.9 million on Sept. 30, 2007.
Vicky Bryan, an analyst at Gimme Credit, said Monday that the credit extension was a sign of bad news for the housing industry and Standard Pacific. “We expect that the housing market could remain depressed through 2008, and we are concerned that drastic measures Standard Pacific has taken to shore up liquidity will be insufficient to sustain it through the cycle.”
The credit extension came just four days after Standard Pacific announced that its CEO since 2001, Stephen Scarborough, “retired” abruptly.
In an earlier note, Bryan wrote that Scarborough’s departure left her “surprised and concerned that SP did not make time to pursue a thorough executive search.”
Click HERE to see Standard Pacific’s credit extension announcement.
OK who had may 14? Action in the stock is interesting, considering the news.