WCI lenders agree to extend credit facility waiver through Jan. 7

By Angela McDaniels

Tacoma, Wash., Dec. 7 - WCI Communities, Inc. said the limited waiver it received under its credit facility has been extended to Jan. 7 from Dec. 7.

The company initially obtained the waiver on Nov. 7 because it was not in compliance with the modified fixed charge coverage covenant of its senior secured revolving credit facility and term loan.

The minimum coverage required under the covenant is 0.50x, and WCI reported a 0.38x coverage ratio for the third quarter.

WCI said it expects to finalize by Jan. 7 a longer-term amendment that will provide greater financial flexibility, including modification of the fixed charges coverage covenant.

The company warned that, if obtained, this amendment will be expensive and there can be no assurance that WCI will be able to comply with the amended covenants.

If WCI is unable to obtain the amendment, its debt could be accelerated, and the company gave no assurance that it would be able to find alternative financing.

In addition, WCI said that if it defaults on its loan agreements, it may be unable to draw additional funds under the credit facility and its tower loan, which could impair its ability to maintain sufficient working capital.

Either situation could have a material adverse affect on the solvency of WCI, according to a company news release.

WCI is a Bonita Springs, Fla., builder of master-planned lifestyle communities.

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