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THE PRESLEY COMPANIES ANNOUNCES BANK AGREEMENTS; REDEMPTION OF JOINT VENTURE PARTNERSHIP INTEREST

 NEWPORT BEACH, Calif., Feb. 1 /PRNewswire/ -- The Presley Companies (NYSE: PDC) today announced that it has signed a forbearance agreement with the majority of its banks on its $360 million revolving line of credit which matured Jan. 31, 1993. The agreement, which runs through March 31, 1993, allows for the company and its banks to continue to negotiate for a restructure and an extension of the current lending agreement. The forbearance agreement includes a modification of Presley's financial covenants regarding minimum net worth and maximum debt-to-equity ratios. The minimum net worth requirement was changed to $125 million, from $140 million, while the maximum debt-to-equity ratio was changed to 3-to-1, from 2.75-to-1. The company believes that a definitive restructured agreement can be reached with its lenders, although no assurances can be given in that regard.
 Presley also announced that it has signed short-term extension agreements on loans totaling approximately $45.7 million, relating to its two joint venture projects. On Jan. 28, 1993, one of these loans on the Horsethief Canyon Ranch joint venture project with an approximate outstanding balance of $20.0 million, which had matured on Nov. 9, 1992, was extended through March 9, 1993. On Jan. 29, 1993, a loan on the Carmel Mountain Ranch joint venture project with an approximate outstanding balance of $25.7 million, which had matured on Dec. 31, 1992, was extended through March 31, 1993. The company believes that current discussions with those banks will result in longer term extensions of these two loans, although no assurances can be given in that regard.
 Also, as of Dec. 31, 1992, the company's Carmel Mountain Ranch joint venture bought back the interest of the company's joint venture partner in that project for a cash price of $9.9 million. The Carmel Mountain Ranch partnership is now 100 percent owned by The Presley Companies and its wholly owned subsidiary.
 Management continues to be concerned about the effect that the decline in the appraisal value of the company's real estate inventory will have on the company's borrowing capacity. The company's borrowing capacity is based on the most recent appraised values of its real estate inventory at any given time. Recent lower appraisals have reduced the company's borrowing capacity. Under the current leading agreement, the borrowing base at Dec. 31, 1992, was approximately $313.9 million whereas principal outstanding at that time was approximately $317.2 million, an excess of approximately $3.3 million of borrowings. Under the forbearance agreement, the banks have agreed not to require a repayment of the excess borrowings during the forbearance period. In the near term, the company anticipates that new appraisals required by the company's lenders will result in lower appraised values, which in turn will reduce the available maximum amount available under the line. The company is continually reviewing the value of its real estate inventory in order to determine if such assets are stated at the lower of cost or net realizable value.
 The Presley Companies is one of California's oldest and largest homebuilders. It has operations in California, Arizona and New Mexico, with 39 sales locations, including 28 in its master-planned communities and 11 at its other projects
 -0- 2/1/93
 /CONTACT: David Siegel or Craig Manchester of The Presley Companies, 714-640-6400/
 (PDC)


CO: The Presley Companies ST: California IN: CST SU:

BP-EH -- LA024 -- 1538 02/01/93 16:59 EST
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Publication:PR Newswire
Date:Feb 1, 1993
Words:564
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