RESTON, VA, Nov. 2, 2009 (Marketwire) --
RESTON, VA -- (Marketwire) -- 11/02/09 -- Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) today announced that it and certain of its subsidiaries (collectively "Comstock" or the "Company") entered into a loan modification with Keybank National Association ("Keybank"), completing its efforts to modify all of the secured loans that the Company has guaranteed. The loan modification amends an existing loan with a $22.8 million outstanding principal balance secured by the Company's Eclipse condominium project and the Company's planned Station View townhouse project (the "Loan") in a manner that will immediately provide Comstock with improved operating cashflow from sales at the two properties.
The key terms of the modification increase the cash flow available to Comstock through reduced principal payments required by Keybank as condominium units are settled at the Eclipse project and through the sale of the Station View project land. The modification reduces the curtailment requirement from 100% of net proceeds to 85% of the net sales price of Eclipse condominium units, providing Comstock with cash equal to 15% of the net sales price as each condominium unit is delivered. The loan modification will be applied retroactively to all settlements occurring on or after July 1, 2009, resulting in an immediate cash infusion to Comstock.
The modification allows for continued receipt by Comstock of 15% of the net sales price of Eclipse condominium units provided Comstock satisfies certain conditions subsequent; including meeting a minimum sales requirement of nine (9) units per quarter on a cumulative basis, and satisfying certain other conditions with respect to certain outstanding unsecured indebtedness of the Company (the "Modification Covenants"). It shall not be deemed a default under the loan should Comstock fail to meet the Modification Covenants but may result in a reversion to the unit release provisions as previously set forth in the existing loan documents.
Recent sales at the Eclipse project have been sufficient to position the Company to meet the Modification Covenants with respect to unit sales through Q4 2009. The Company also has entered into a contingent contract covering the sale of the Station View land and expects that, provided the conditions of sale are met, the sale will be consummated in the first quarter of 2010.
