David Keller, TOUSA's cfo, said the syndication process started when the homebuilder contacted lead Citigroup and showed interest in negotiating a larger revolver and improving pricing. He added that a number of homebuilders have increased their credit facilities in the past year, adding that this was an opportunity for the company to also lock in future resources. M/I Homes, Toll Brothers, M.D.C. Holdings and WCI Communities, have also put in place increased bank lines as they try and sustain big year-on-year gains (LMW, 11/11). "The market is receptive to this type of credit right now," Keller noted. He declined to provide pricing, but said improved terms are a reflection of the company's better financial results and position.
Deutsche Bank has joined Citigroup as a lead on the facility. While Citigroup led TOUSA's previous financing, Deutsche Bank served as a member of the syndicate and was brought into a lead spot as the bank provided additional borrowing capacity and because of the previous relationship, Keller stated. David Bouton at Citigroup and Deutsche Bank's Richard Grellier arranged the financing, he said. Fourteen other banks also participate in the new credit line and four lenders are new. J.P. Morgan, PNC Bank, Sovereign Bank and Bank of the West. Bank United of Florida was the only lender that dropped out as TOUSA was not able to meet the bank's yield requirements, he explained.
Meanwhile, TOUSA's mortgage company, Preferred Home Mortgage Company, entered into a one-year, $100 million mortgage warehouse credit. This facility also carries a $50 million accordion feature. The mortgage facility was provided by Countrywide Homeloans and will finance mortgages for TOUSA's homebuyers.