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Standard Pacific Plunges on Debt Worries

Shares of Irvine-based homebuilder Standard Pacific Corp. closed down 13% Monday after falling as much as 35% during the day on debt worries.

The stock plunge reflects speculation about Standard Pacific’s ability to “renegotiate its credit revolver and overall viability as a going concern,” JP Morgan Securities Inc. analyst Michael Rehaut wrote in a note to clients.

Rehaut stressed that he believed the concerns are overblown, according to the Associated Press.

Standard Pacific should continue to generate cash and receive payments from joint ventures, he said.

That should be enough to cover $257 million in outstanding debt on a revolving line of credit in the second half of the year, according to Rehaut.

The company also has $2.94 billion in land and homes, he said.

Homebuilders were hit Monday on the news that mortgage lender American Home Mortgage Investment Corp. of Melville, N.Y., filed for bankruptcy protection.

But most recovered by the end of the day.

Standard Pacific’s shares now are down 60% for the year with a market value of $685 million.

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