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iStar Reports Losses for Quarter and Year

NEW YORK CITY-The company says it's preparing to close on a secured credit facility worth up to $1 billion.

By Paul Bubny | Updated on February 26, 2009

NEW YORK CITY-iStar Financial on Thursday reported 2008 net losses of $22.6 million and $234.1 million for the fourth quarter and full year, respectively. That compares to a loss of $78.7 million for Q4 2007 and net income of $192.3 million for the year ended Dec. 31, ’07. The real estate finance company, headquartered in Manhattan, also says it’s lining up a new secured credit facility that will be worth between $700 million and $1 billion.

Results for Q4 ’08 include $252 million of loan loss provisions, $150 million of impairments, $323 million of gains related to the early extinguishment of debt and $19 million of gains from the sale of seven corporate tenant lease assets, according to iStar’s SEC filing. iStar’s full-year results for ’08 include $1 billion of loan loss provisions, $334.8 million of impairments, $392.9 of gains associated with the early extinguishment of debt, $64.3 million of gains from sale of 49 CTL assets and $285.1 million of gains from the sale of the company’s timber investments.

The company currently has commitments of approximately $700 million from its group of lenders toward the secured credit facility. If completed, the new facility would mature in June 2012 and would bear interest at a rate of LIBOR + 2.5%. Lenders who participate in the new secured loan would receive collateral security for their outstanding unsecured positions in the company’s existing unsecured bank lines, according to a release. The new facilities would also provide for “additional operating flexibility through the modification of certain financial covenants,” the release states. The new secured facility and the restructuring of the existing facilities are expected to close next month.

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