Lennar stated in a Securities and Exchange Commission documentthat it has determined it would be more cost-effective to enterinto cash-collateralized letter-of-credit agreements and hasentered into such agreements with two banks with a capacitytotaling $225 million. The company will use $164 million to replaceletters of credit issued under the prior credit facility andanticipates saving at least $8 million annually.
Earlier this month, Lennar announced that its Rialto CapitalAdvisors subsidiary will handle management and workouts on thedistress portfolios, for which the FDIC will retain 60% equity. Thecompany cites its success in profiting from such loans during theearly 1990s real estate downturn.
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