Credit Renegotiations Successful for Hammock Dunes Condo Developer, WCI Communities

Good news for Hammock Dunes property owners.

By Toby Tobin

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January 17, 2008 – Palm Coast, FL – Less than one year ago, WCI Communities, developer of the tower condominiums at Hammock Dunes in Palm Coast, Florida, turned down Carl Icahn’s bid of $22 per share for all outstanding shares of the company. Since, WCI shares dropped as low as $1.35 per share as it failed to comply with covenants of its credit facility. It was granted three short-term extensions by lenders. The most recent extension of only nine days expired yesterday. Failure to reach a deal for a long term solution to the credit issues may have forced WCI into bankruptcy. At the last minute, a deal was reached according to a press release issued by the company late yesterday.

Carl Icahn, who owns over 14% of WCI shares, was named chairman after his failed attempt to take over the company. Analysts credit him with the successful negotiations with lenders. “The amendments, which extend through June 30, 2009, modify, suspend or waive certain covenants and provide the company with greater operating and financial flexibility to allow the company to continue to manage its business during this industry downturn,“ according to the company. The amended agreements involved Bank of America Corp. and KeyCorp’s KeyBank.

WCI’s shares closed yesterday at $2.44 after a volatile day of trading. It was higher in after market trading.

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