Atlantic Gulf Communities closes on debt refinancing loan.

MIAMI--(BUSINESS WIRE)--Sept. 30, 1996--Atlantic Gulf Communities Corp. (NASDAQ:AGLF) announced Monday that it closed on three credit facilities totalling $85 million provided by Foothill Capital Corp., including a two-year extension of the company's existing $20 million working capital facility.

A portion of the proceeds from these facilities was used to refinance approximately $37.8 million of secured debt and extend its maturity from Dec. 31, 1996 to June 30, 1998. The company used additional proceeds, along with cash on hand and warrants for up to 13% of the company's common stock at $6.50 per share, to prepay at a discount its $54.9 million of secured debt due Dec. 31, 1998. Finally, the company has up to $19 million of additional funds available under the Foothill facilities which may be applied, if necessary, to the payment of the $41.7 million of unsecured 12% notes due Dec. 31, 1996.

Since Dec. 31, 1995, the company has reduced its corporate debt (excluding project debt) by $53.9 million, to $149.4 million. With repayment of the unsecured 12% notes due at year end, the company expects that its corporate debt will be reduced by an additional $22.7 million, to $126.7 million.

"The Foothill transaction allows the company to continue implementing its business plan, while reducing debt and simplifying its balance sheet," said J. Larry Rutherford, president and CEO of Atlantic Gulf Communities. "I'm confident that our continuing relationship with Foothill Capital will bring the company's goals into sharper focus and build shareholder value."

Atlantic Gulf Communities Corp., with assets of approximately $280 million, is one of Florida's largest real estate developers. The company develops finished residential lots for builders in many of Florida's most active markets including South Florida, Tampa, Orlando, Ft. Myers and Jacksonville, in addition to owning 44,000 acres in other parts of Florida, and 5,500 acres in the Cumberland Plateau area of Tennessee. Headquartered in Miami, the company is a proven leader in professional development services, and is known for its leadership role in environmental quality.

The company's ability to pay on a timely basis its corporate debt will depend on certain factors beyond its control, including closings on real property sales, business conditions, general economic conditions, interest rates and competitive factors. -0-

NOTE TO EDITORS: In the World Wide Web address noted in this news release, there is a double slash between http: and www.atlanticgulf.com These symbols may not appear properly in some systems.

CONTACT: Atlantic Gulf Communities, Miami

Harry Rose, 305/859-4376

Internet Address: http://www.atlanticgulf.com