WCI Communities Completes $175 million Capital Raise

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Four years after filing for Chapter 11 bankruptcy protection, WCI Communities, one of the country's leading developers of leisure-oriented master-planned communities, recently announced it successfully raised $175 million of new capital, including a $125 million term note due in 2017 and $50 million of additional equity.

Proceeds of the investment will be used to pay off WCI's existing term loan and provide the company with additional growth capital to expand its homebuilding and development operations in Florida.

Investment funds managed by Monarch Alternative Capital LP and Stonehill Capital Management LLC provided the debt capital, while existing shareholders - including Monarch and Stonehill - provided the additional equity through a rights offering.

"These investments support the next phase of WCI's progression as we continue to execute the elements of our growth plan, including strategic land acquisitions in key Florida markets to expand our portfolio of lifestyle communities," said David Fry, WCI's president and CEO.

WCI is currently marketing and building homes in 23 neighborhoods within nine active master-planned communities. The developments offer a range of single-family, townhome and condominium residences.

"The Florida real estate market has shown signs of improved health, and we have exceeded sales projections in several of our communities through the first part of this year," said Fry. "The company is on target to increase its closings and homebuilding revenue by more than 200 percent in 2012 - a testament to the extraordinary efforts of our associates."

WCI has developed more than 30 amenity-rich communities over the previous 50 years, including 550 golf holes and 1,000-plus boat slips, and country club, tennis and recreational facilities. The company also made a name for itself as one of the leading builders of luxury high-rise condominiums throughout Florida.

The recent infusion of capital represents a dramatic shift in events from four years ago, when the Bonita Springs-based company was bankrupt.

In 2005, at the height of the Florida housing boom, WCI Communities Inc. posted a profit of $186 million and sales of $2.6 billion. Fast forward to the first six months of 2008 and the company was losing $184 million on $367 million in revenues.

On Aug. 4, 2008, faced with the prospect of defaulting on $1.8 billion in debt, WCI and 130 of its subsidiaries filed for Chapter 11 bankruptcy protection from its creditors, making it one of the largest Florida-based casualties of the housing downturn.

"This transaction strengthens our balance sheet and provides the flexibility for future growth" said WCI chief financial officer Russell Devendorf. "It demonstrates our investors' tremendous support for the company and its long-term strategy."

WCI Communities creates master-planned lifestyle communities, catering to move-up, active adult and second-home buyers. WCI offers traditional single- and multi-family home choices with prices from the mid-$100,000s to just under $1 million. In addition to homebuilding and development, WCI generates revenues from its Prudential Florida Realty business, the second largest residential realty company in Florida; its Wells Fargo-affiliated mortgage services; insurance and title services; its recreational amenities; and through land sales and joint ventures.