Shea Homes enters into $125 million two-year secured revolver

By Marisa Wong

Madison, Wis., Feb. 26 - Shea Homes LP entered into a $125 million two-year secured revolving credit facility on Feb. 20 with U.S. Bank NA as administrative agent, lead arranger and bookrunner. The credit facility became effective as of Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

Loans bear interest at Libor plus 275 basis points. The company will also pay a 50-bps fee on the average unused portion of the revolver.

The company's obligations under the credit facility are secured by a lien on substantially all of its assets. The liens securing the revolver are pari passu with the liens securing its 8 5/8% senior secured notes due 2019, the filing noted.

The company will use the revolver for general corporate purposes.

The facility contains affirmative and negative covenants, including financial covenants. The company's ability to draw on the revolver is subject to there being no default continuing under the facility. If certain defaults occur, including default under some of the financial covenants, the revolver will convert into an 18-month term loan with amortization payments equal to 1/18th of the then outstanding amount of the facility.

As previously disclosed, in order to enter into the revolving facility, the company completed a consent solicitation in November to amend the indenture governing its 8 5/8% notes.

Shea is a Walnut, Calif.-based homebuilder.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.