X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DELRAY BEACH, FL-Oriole Homes Corp. expects to reduce some of its debt costs by redeeming 100% of $35.8 million in outstanding senior notes. The Delray Beach-based homebuilder plans to make the move July 15 on senior notes due 2003 and payable at 12 1/2%.

Announcement of the redemption comes as the 35-year-old company implements a plan to overcome years of earnings losses.

“The transaction will have the favorable impact of reducing cost of capital in the range of 450 to 500 basis points in the near term,” Joe Pivinski, Oriole Homes’ chief financial officer, says in a prepared statement.

The arrangement is “expected to have a positive strategic effect on Oriole’s operations as the terms and conditions of the financing package were more flexible and less restrictive than that of the indenture.”

To finance the redemption, the company has secured about $34.4 million in asset-backed loans through Miami-based Ocean Bank. The company will contribute another $1.3 million in cash to cover the remaining costs.

Although it did not disclose full terms of the deal, the company will pay a floating interest rate at the prime lending rate, plus 1/2%, over a minimum term of two years. The deal also provides for an undisclosed amount of cash for working capital needs.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. Apartments 2020Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.