Stanley-Martin Communities heads off repurchase offer requirement to be triggered by Q2 loss

By Angela McDaniels

Tacoma, Wash., July 22 - Stanley-Martin Communities, LLC said it expects to record a loss in the second quarter but will not be required to hold a tender offer for its 9¾% senior subordinated notes due 2015.

Specifically, the loss will cause the company to miss the $35 million tangible net worth requirement of the notes for a second consecutive quarter. This would normally trigger a requirement that Stanley-Martin obtain additional cash equity or offer to purchase 10% of the outstanding notes at par, according to a company news release.

However, the repurchase offer can be avoided if the company has already repurchased notes with a principal amount greater than the amount of notes that would be subject to the repurchase offer.

Stanley-Martin said $20.6 million of the notes have been repurchased to date, so no further action will be needed.

The expected loss will result from asset impairments, which Stanley-Martin attributed to challenging market conditions for new homes.

Preliminary results show that homebuilding revenue was $30.6 million for the second quarter, down 29% from the $43.2 million recorded in the second quarter of 2007, according to the release.

Stanley-Martin is a private homebuilder based in Reston, Va., that markets to entry-level buyers and to first- and second-time move-up buyers.

© 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.