Announcement of the redemption comes as the 35-year-old company implements a plan to overcome years of earnings losses.
"The transaction will have the favorable impact of reducing cost of capital in the range of 450 to 500 basis points in the near term," Joe Pivinski, Oriole Homes' chief financial officer, says in a prepared statement.
The arrangement is "expected to have a positive strategic effect on Oriole's operations as the terms and conditions of the financing package were more flexible and less restrictive than that of the indenture."
To finance the redemption, the company has secured about $34.4 million in asset-backed loans through Miami-based Ocean Bank. The company will contribute another $1.3 million in cash to cover the remaining costs.
Although it did not disclose full terms of the deal, the company will pay a floating interest rate at the prime lending rate, plus 1/2%, over a minimum term of two years. The deal also provides for an undisclosed amount of cash for working capital needs.
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