Dallas, Texas 10/18/2013 (Financialstrend) – In what could be termed as jarring news with respect to the mid capped 41.94 billion market capped Standard Pacific Corp. (NYSE:SPF) has been downgraded by rating agency Raymond James. The residential construction company has been downgraded from a “buy” previously to a “Hold”. Investors in Standard can take heart from the fact that Raymond James has also downgraded its closest peer and competitor KB Home from a “Hold” to “Sell”.
The down grade in Standard Pacific comes in the back of close to 8.4% dip in market valuation over the past 90 days. The stock has been under pressure over the past few quarters as the residential construction sector went through short bursts of pickup in demand interspersed by consumer disinterest. The share holders of this stock would be hoping that the 5% increase over the past week that has been witnessed will build up into a stronger and sustained rally.
In this context is September 26 announcement from Standard Pacific Corp. (NYSE:SPF) that it has managed to renegotiate the terms of its credit agreement with the consortium of lenders led by JPMorgan Chase Bank, N.A. Under the reworked terms of the loan, Standard has managed to get rid of the restrictive weighted borrowing base clause and has got the terms of mandatory repayment relaxed. The Company will continue to have access to $350 million loan lien with the term and interest on principal remaining unchanged.
With more easy access to revolving credit, the share holders of the company will be hoping that the home builder can take up more projects leading to increase in its sales during its 4Q. The annual sales of the company are settled at $1.56 billion with an income of $335 million in the same period. The investment community has set a PT of $9.95 for the stock.