Comstock Homebuilding Companies Enters Into Agreement to Amend Terms of Its Senior Unsecured Notes
January 10 2008 - 8:00AM
Marketwired
RESTON, VA ("Comstock" or the "Company") today announced that it
entered into an agreement with the Noteholder of its $30.0 million
senior unsecured notes (the "Noteholder") whereby the Company has
the option until March 10, 2008 to either: (i) retire the $30.0
million senior secured notes in full upon the payment of $15.0
million ("Cash Closing"), or (ii) secure a $15.0 million reduction
in the outstanding principal amount of the notes by paying $8.0
million in cash and issuing the Noteholder a warrant for the
purchase of one million shares of the Company's Class A Common
Stock with a seven-year term at an exercise price of $0.70 per
share ("Financed Closing"). Under the terms of the agreement the
Company posted a non-refundable deposit of $250,000 to be applied
at closing. The Company is currently evaluating its options with
respect to funding of the closing and has until February 29, 2008
to notify the Noteholder as to which option, if any, it will
exercise.
In the event the Company elects to proceed with the Financed
Closing, the current $30.0 million notes will be replaced by notes
with, among other things, a principal balance of $7.0 million, a
five year maturity, less restrictive financial covenants (with
compliance waived until June 30, 2008) and no prepayment
penalties.
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies, Inc. is a
publicly traded, diversified real estate development firm with a
focus on affordably priced for-sale residential products. Comstock
builds and markets single-family homes, townhouses, mid-rise
condominiums, high-rise condominiums, mixed-use urban communities
and active adult communities. The company currently markets its
products under the Comstock Homes brand in the Washington, DC;
Raleigh, North Carolina; and Atlanta, Georgia metropolitan areas.
Comstock Homebuilding Companies, Inc. trades on NASDAQ under the
symbol CHCI. For more information on the Company or its projects
please visit www.comstockhomebuilding.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Statements that are predictive in
nature, that depend upon or refer to future events or conditions,
or that include words such as "may," "will," "expects," "projects,"
"anticipates," "estimates," "believes," "intends," "plans,"
"should," "seeks," and similar expressions, including statements
related to Comstock's expected future financial results and
anticipated growth in the Washington DC housing market, are
forward-looking statements. Forward-looking statements involve
known and unknown risks and uncertainties that may cause future
results to differ materially from those projected or contemplated
in the forward-looking statements. These risks and uncertainties
include, but are not limited to, economic, market and competitive
conditions affecting Comstock and its operations and products,
risks and uncertainties relating to the market for real estate
generally and in the areas where Comstock has projects, the
availability and price of land suitable for development, materials
prices, labor costs, interest rates, Comstock's ability to service
its significant debt obligations, fluctuations in operating
results, anticipated growth strategies, continuing relationships
with affiliates, environmental factors, government regulations, the
impact of adverse weather conditions or natural disasters and acts
of war or terrorism. Additional information concerning these and
other important risks and uncertainties can be found under the
heading "Risk Factors" in the Company's most recent form 10-K, as
filed with the Securities and Exchange Commission on March 16,
2007. Comstock specifically disclaims any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future developments or otherwise.
Contact: Bruce Labovitz Email Contact 703.230.1131
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