9/20/2023 0 Comments Death spiral convertible bond![]() Incentives increased to $46,000 per home from, $35,900 per home.This was Lennar’s worst ever quarterly report.“Consumer confidence in housing has remained low, while the mortgage market has continued to redefine itself, creating higher cancellation rates,” he added. “Heavy discounting by builders, and now the existing home market as well, has continued to drive pricing downward,” Lennar Chief Executive Stuart Miller said in a statement. The Financial Post is reporting Lennar results plunge as housing woes worsen. For a better idea of the relative risks, pay attention to the credit spreads, not just the numerical rankings. That’s right Minyans, a publicly traded homebuilder is down to having to pull its skimpy dividend to make ends meet.īased on Fil’s chart of Credit Default Swaps the “ three horsemen of the housing apocalypse” are: Beazer Homes (BZH), Standard Pacific (SPF), and Hovnanian (HOV). It also eliminated its $10M/year dividend. The latter, one of the three horsemen of the housing apocalypse (at least based upon the current Credit Default Swap spreads), issued convertible debt which, short of a “ death spiral financing“, looks stunningly onerous. Fil Zucchiwas talking about it today on Minyanville.Ī whole 6 days after Robert Toll was speaking about the housing crash in the past tense the Spider Homebuilders (XHB) made new lows on the back of Standard Pacific (SPF) 12% drop. This type of financing agreement is about as desperate as one gets. That offering specifically allows shorting and thus is in stark contrast to the Bank of America (BAC) / Countrywide Financial deal (CFC) deal that came with share restrictions to prevent shorting (see Countrywide Bailed Out by Bank of America?) generally accepted accounting principles currently in effect, the borrowed shares will not be considered outstanding for the purpose of computing and reporting earnings per share because the shares lent pursuant to the share lending agreement must be returned to the Company on or about October 1, 2012, or earlier in certain circumstances. While the borrowed shares will be considered issued and outstanding for corporate law purposes, the Company believes that under U.S. ![]() ![]() Under the share lending agreement, the share borrower will offer and sell the borrowed shares in a registered public offering and will use the short position resulting from the sale of such shares to facilitate the establishment of hedge positions by investors in the notes offered. Scarborough, Chairman, Chief Executive Officer and President of Standard Pacific Corp.(SPF)today announced the pricing of the previously announced public offering of the Company’s $100 million aggregate principal amount of 6.0% convertible senior subordinated notes due 2012.Ĭoncurrently with the offering of the notes and the convertible note hedge transactions, the Company entered into a share lending agreement with an affiliate of Credit Suisse, pursuant to which the Company will lend 7,839,809 shares of its common stock to such affiliate. Standard Pacific is offering $100 Million of Convertible Senior Subordinated Notes Due 2012. Today let’s take a closer look at the convertible offering. Is this new math or just homebuilder math? So SPF is eliminating its dividend to pay down debt by $10 million while at the same time announcing a new $100 million debt offering. The company expects to save about $10 million annually, with the funds to be used to pay down debt. (SPF) said it would offer $100 million in convertible notes, and that its board of directors has eliminated the company’s quarterly cash dividend. Compare Standard and Premium Digital here.Īny changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel.Standard Pacific Corp. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many user’s needs. If you’d like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for $69 per month.įor cost savings, you can change your plan at any time online in the “Settings & Account” section. For a full comparison of Standard and Premium Digital, click here.Ĭhange the plan you will roll onto at any time during your trial by visiting the “Settings & Account” section. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. Standard Digital includes access to a wealth of global news, analysis and expert opinion. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.
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