Irvine-based Standard Pacific Corp. wants to lower its credit lines with Bank of America Corp. and JPMorgan Chase & Co. to stay in compliance with terms of the deals as its value drops amid the housing downturn.
Homebuilder Standard Pacific is talking with the banks to lower its main credit line from $1.1 billion to $900 million, according to a filing with the Securities and Exchange Commission.
It also wants to lower a secondary loan from $250 million to $225 million.
The lenders are expected to approve the requests.
Analysts expect Standard Pacific to violate terms of the original credit lines, specifically a requirement that its tangible net worth,assets and intangibles such as patents and brand value minus liabilities,not go below $1.4 billion.
The company could go below that before the end of the year, according to one analyst.
Standard Pacific faces a continued slowdown in sales of new homes that’s predicted to last for the rest of the year and into 2008.
Earlier this week, a Banc of America analyst reduced its stock rating from “buy” to “neutral” this week.
The company counts a Wall Street market value of about $640 million, down nearly 70% for the year.
Standard Pacific has been hit by concerns about debt.
The company’s shares plunged earlier this month on worries about its ability to renegotiate its credit lines.
