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Kimball Hill loan lenders extend waiver agreement
By Sara Rosenberg
New York, March 14 - Kimball Hill Homes extended the waiver agreement with its bank group through April 11 from March 14 on Friday, according to an 8-K filed with the Securities and Exchange Commission.
Under the waiver agreement, the company's revolver was reduced to $360 million from $400 million.
Also, the company can't make payments or incur any debt in connection with existing land purchase obligations, other than certain land purchase obligations agreed to by the lenders and provided that the aggregate amount of the approved purchases does not exceed $2.5 million.
In addition, the company is prohibited from making payments in excess of an aggregate amount of $500,000 in connection with any joint venture obligations until April 11.
The waiver also requires that cash and cash equivalent proceeds from certain dispositions, including the sale/leaseback of its current headquarters, be deposited into a cash collateral account, with a portion of these proceeds to be made available to the company during the term of the waiver period.
Lastly, the company granted lenders additional liens on certain other of its cash accounts so that they now have a lien on all cash accounts.
During this extension period, the company will continue active discussions with its lender group regarding a long-term amendment that will help reposition it in light of current challenges facing the homebuilding industry.
Kimball Hill, a Rolling Meadows, Ill.-based homebuilder, has been engaged in constructive discussions with its bank group since last year because it was not in compliance with several of its financing covenants.
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