IMH Financial, NWRA Ventures enter agreement to allow $80 million convertible loan prepayment

By Jennifer Chiou

New York, April 9 - IMH Financial Corp. entered into an agreement on April 4 with senior lender NWRA Ventures I, LLC, allowing for an $80 million early prepayment of its senior secured convertible loan prior to May 30, according to an 8-K filed with the Securities and Exchange Commission.

The agreement, among other things, requires IMH to repurchase 319,844 of its shares held by NW Capital at a price equal to the original purchase price of $8.02 apiece, which is $1.3 million above the stock's estimated fair value of $4.12 per share as of Dec. 31, the filing noted.

IMH said that the prepayment amount would result in a roughly $13 million reduction in interest expense that the company would otherwise incur if the loan was held to scheduled maturity in June 2016.

As of May 30, this prepayment amount would be $12.9 million in excess of the loan's principal balance, deferred interest balance and amortized exit fee.

There is no penalty if prepayment does not occur.

In April 2011, the company arranged $50 million convertible loan financing with a 17% coupon through NWRA Ventures.

Based in Scottsdale, Ariz., IMH is a private real estate lending and investment company.

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