Lennar stated in a Securities and Exchange Commission document that it has determined it would be more cost-effective to enter into cash-collateralized letter-of-credit agreements and has entered into such agreements with two banks with a capacity totaling $225 million. The company will use $164 million to replace letters of credit issued under the prior credit facility and anticipates saving at least $8 million annually.
Earlier this month, Lennar announced that its Rialto Capital Advisors subsidiary will handle management and workouts on the distress portfolios, for which the FDIC will retain 60% equity. The company cites its success in profiting from such loans during the early 1990s real estate downturn.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
