LandSource seeks short-term forbearance/amendment agreement

By Sara Rosenberg

New York, Feb. 7 - LandSource Communities Development LLC is hoping to get a five-day forbearance/amendment agreement from its bank loan lenders to stay out of default under a borrowing base covenant, according to a market source.

Consents from lenders were due on Thursday at 5 p.m. ET.

The proposed forbearance is only for five days because the "lenders want to keep it on a short leash and kind of revisit it," the source said. Originally, the company wanted a 60-day forbearance period.

As was previously reported, the company is facing non-compliance with the borrowing base covenant as a result of a new appraisal on its land that showed deterioration in the underlying value of that land.

The company needs $800 million to bring it into compliance with the covenant and cover a cash-flow shortfall over the next two years. However, the sponsors are only willing to put in $300 million.

LandSource is a joint venture between Lennar Corp., LNR Property Corp. and MW Housing Partners. Its primary investment is Newhall Land and Farming Co., which owns 15,000 acres in Santa Clarita Valley, Calif.

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