Lennar Terminates $1B Credit Facility

MIAMI-Locally based Lennar Corp. says it has terminated its $1.1-billion senior unsecured revolving credit facility with a group of lenders led by JPMorgan Chase Bank. The decision comes shortly after the major homebuilder’s deal with the FDIC to pay $243 million for at least $3 billion worth of distressed loan portfolios that include a small percentage of commercial real estate.

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.