LandSource extends forbearance agreement until Feb. 18 week

By Sara Rosenberg

New York, Feb. 12 - LandSource Communities Development LLC got a five-day extension of the forbearance/amendment agreement that is keeping it out of default under a borrowing base covenant, according to a market source.

The original forbearance agreement was obtained last week and also was in effect for a period of five days.

As part of the original agreement, pricing on the first-lien term loan B was raised to Libor plus 475 basis points from Libor plus 275 bps and lenders got a 12.5 bps fee.

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. The sponsors, however, 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 the Newhall Land and Farming Co., which owns 15,000 acres in Santa Clarita Valley, Calif.

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