WCI Communities has replaced a $405 million bank facility with a new $600 million revolver that will provide more financial flexibility and enable the construction company to buy more land. WCI needs more capital for the additional land purchases expected this year, said Steven Zenker, v.p. of investor relations for the Bonita Springs, Fla.-based homebuilder.
The new unsecured facility matures in four years and has an accordion feature that allows increased commitments up to $750 million. Last year, WCI also raised money through both a convertible and a high-yield bond issue, Zenker said. The new revolver is another piece of the company's growth strategy, he noted.
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| Steve Adelman |
The new revolver replaces a $405 million facility expiring next June. WCI anticipates the renewal of its facilities one or two years ahead of maturity, said Steve Adelman, senior v.p. and treasurer. The new facility has slightly more flexible covenants and improved rates, Adelman added. He declined to provide pricing. Zenker attributed an improvement in pricing and terms to WCI's current financial strength. He said WCI went through a difficult period in the years after Sept. 11 and has strengthened significantly during 2004. Order rates have increased from $685.2 million in the first half of 2003 to $966 million in the same period of 2004, he noted.
The new revolver is led by Bank of America. Wachovia Bank serves as syndication agent while Keybank and Bank One are co-documentation agents. Fleet Bank led the company's previous revolver. Adelman said WCI's relationship with B of A started in the late 1980's with BankBoston and evolved through Fleet. WCI started the relationship with First Union, meanwhile, and stayed with Wachovia after the two banks merged. "We are very pleased with our bank group and the support they've provided us during the years. Many of them have been lenders of WCI for a number of years now. We [also] welcome the new banks that have recently joined our credit facility," Adelman added.
Keybank, Bank One, Citigroup, Branch Bank and Trust, KBC Bank and MidFirst Bank are new members of the syndicate. The remaining banks are Guaranty Bank, Comerica Bank, AmSouth Bank, Fifth Third Bank, Sovereign Bank, SunTrust Bank, BankUnited, Compass Bank, Credit Suisse First Boston, Deutsche Bank, National City Bank, UBS and Washington Mutual.