SOURCE: Tarragon Corporation

October 01, 2007 07:30 ET

Tarragon Corporation Announces Reinstatement of $79.6 Million of Fannie Mae Loans

Loans of $56.6 Million With Other Lenders Also Brought Current

NEW YORK, NY--(Marketwire - October 1, 2007) - Tarragon Corporation (NASDAQ: TARR) today announced that it has entered into an agreement with the Federal National Mortgage Association, or Fannie Mae, to reinstate a combined $79.6 million in loans it made to Tarragon and/or its affiliates. In addition, Tarragon has restored loans from five other lenders totaling $56.6 million to good standing, and has reached an agreement in principal with another lender to reinstate an additional $73.2 million in loans in connection with the proposed sale of a property anticipated to close by October 15, 2007.

On September 21, 2007, Tarragon announced that it had met the terms and conditions of the agreement with its largest lender, General Electric Capital Corporation (GECC), under which GECC reinstated over $550 million in loans it made to Tarragon and/or its affiliates.

Tarragon's agreements with GECC and Fannie Mae, and its ongoing negotiations with its other significant lenders, are part of an overall plan designed to restore the company's liquidity and improve its financial condition. The plan currently contemplates additional property sales, the proceeds of which would be used to repay or bring current Tarragon's obligations under other loan agreements and to provide Tarragon with additional liquidity.

There can be no assurance, however, that the contemplated property sales will be completed on acceptable terms or in a timely manner or that Tarragon will be able to reach agreements with other lenders. If not, it may be necessary for Tarragon to undertake such other actions as may be appropriate in the light of its current liquidity situation.

Tarragon also announced today that its board of directors approved the suspension of the payment of quarterly dividends on Tarragon's 10% cumulative preferred stock to preserve liquidity as negotiations continue with other significant lenders.

About Tarragon Corporation

Tarragon Corporation is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas and Tennessee. To learn more about Tarragon Corporation, visit: www.tarragoncorp.com.

Forward-looking Statements

Information in this press release includes "forward-looking statements" made pursuant of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "intends," "estimates," "designed to" and variations of these words and similar expressions are intended to identify forward-looking statements, which include statements regarding discussions with other significant lenders, the expected use of net proceeds of currently contemplated property sales, Tarragon's financial condition and short-term liquidity needs and strategic and financial alternatives that may be pursued by, or available to, Tarragon. Actual results and the timing of certain events could differ materially from those projected or contemplated by these forward-looking statements due to a number of factors, including Tarragon's ability to complete currently contemplated property sales on acceptable terms and conditions and to identify suitable strategic or financial alternatives in the near-term, the results of negotiations with Tarragon's lenders and other creditors, conditions in the homebuilding industry, the residential real estate and mortgage markets and the capital and financial markets generally, general economic conditions, interest rates and other risk factors outlined in Tarragon's SEC reports, including its Annual Report on Form 10-K. Tarragon assumes no responsibility to update forward-looking information contained herein.

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Contact Information

  • Contacts:

    Broadgate Consultants, LLC
    Alan H. Oshiki
    (212) 232-2222
    Email Contact

    Tarragon Corporation
    William S. Friedman
    (212) 949-5000
    Email Contact