California Coastal gets court OK of $184 million financing commitment

By Caroline Salls

Pittsburgh, June 21 - California Coastal Communities, Inc. received court approval of a $184 million commitment from Luxor Capital Group, LP to refinance its Brightwater development project debt, according to a company news release.

The commitment remains subject to the successful negotiation and execution of definitive loan documents and the court's approval of the company's plan of reorganization.

In connection with the commitment, California Coastal said it will amend its plan of reorganization to provide for the repayment of the existing debt in cash on the plan effective date.

As previously reported, the company filed a motion last week for approval of a $182 million exit financing commitment from Luxor. However, both Monday's news release and a court order approving the commitment listed the loan amount as $184 million.

According to the motion, the financing commitment provides a new $40 million first-lien loan maturing on March 31, 2013, a new $42 million second-lien loan maturing on Dec. 31, 2013, and a new $100 million third-lien loan maturing on Dec. 31, 2015.

Interest on the first-lien loan is Libor plus 550 basis points, with a Libor floor of 200 bps.

Interest on the second-lien loan is Libor plus 950 bps, with a Libor floor of 200 bps.

Interest on the third-lien loan is an annual fixed rate of 15%, with 50% of such interest payable in cash and the remainder accruing and added to the principal balance.

After the first- and second-lien position loans are repaid, the company will have an option to pay interest on the third-lien position loan in cash at an annual fixed rate of 12%.

The third-lien loan will also receive a revenue participation of 5% of the gross proceeds from the sale of homes at California Coastal's Brightwater master planned community, which is its largest project.

California Coastal Communities, a residential land development and homebuilding company based in Irvine, Calif., filed for bankruptcy on Oct. 27, 2009 in the U.S. Bankruptcy Court for the Central District of California. Its Chapter 11 case number is 09-21712.

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