Accredited Gets $200 Million in Additional Funding; Gives Up Equity in Return

Accredited Home Lenders Holding Co. (NASDAQ:LEND) said Tuesday that it has received a commitment for a $200 million term loan from one or more entities managed by Farallon Capital Management, L.L.C.

The proceeds of the loan will be used for general working capital, the funding of mortgage loans and other corporate needs, Accredited said in a press statement. The loan has a five-year term, an interest rate of 13 percent per year, and may be repaid by Accredited at any time over the life of the loan, subject to certain conditions and prepayment fees.

In connection with the term loan, Accredited will issue Farallon approximately 3.3 million warrants in a private placement, with an exercise price equal to $10 per share. The warrants expire ten years from their issuance date. Farallon will also receive certain preemptive rights to purchase additional equity securities of the Company and certain registration rights with respect to its equity securities in the Company.

The proposed transaction is subject to completion of definitive documentation, receipt of required third party and governmental consents and licenses, and certain other conditions.

The term loan when funded and the sale of $2.7 billion of mortgage loans announced on March 15, 2007, comprise part of the Accredited’s strategic steps to enhance liquidity, although sources close to the transactions have informed HW that the current extra liquidity is not enough to solve the lender’s current liquidity problems.

Accredited representatives would not provide additional comment beyond the information provided in its press statement.

For more information, visit http://www.accredhome.com.