Bluegreen Corp. has a market cap of $99.5 million; its shares were traded at around $3.06 with a P/E ratio of 11.4 and P/S ratio of 0.3. Bluegreen Corp. had an annual average earning growth of 29.8% over the past 10 years.BXG is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Wells Fargo Term Loan. On April 30, 2010, we entered into a definitive agreement with Wells Fargo, which amended, restated and consolidated our notes payable to Wachovia and the line-of-credit issued by Wachovia into a single term loan with Wells Fargo (the Wells Fargo Term Loan). The notes payable and line-of-credit which were consolidated into the Wells Fargo Term Loan had a total outstanding balance of $36.4 million as of April 30, 2010. In connection with the closing of the Wells Fargo Term Loan, we made a principal payment of $0.4 million, reducing the balance to $36.0 million, and paid accrued interest on the existing Wachovia debt. Principal payments are effected through agreed-upon release prices as real estate collateralizing the Wells Fargo Term Loan is sold, subject to minimum remaining required amortization of $2.8 million in 2010, $10.6 million in 2011 and $20.2 million in 2012. In addition to the resort projects previously pledged as collateral for the various notes payable to Wachovia, we pledged additional timeshare interests, resorts real estate, and the residual interests in certain of our sold VOI notes receivables as collateral for the Wells Fargo Term Loan. Wells Fargo has the right to receive as additional collateral, the residual interest in one future transaction which creates such a retained interest. The Wells Fargo Term Loan bears interest at the 30-day London Interbank Offered Rate (LIBOR) plus 6.87% (7.13% as of September 30, 2010) and includes financial covenants related to net worth, cash balances, liabilities-to-equity ratios and EBITDA-to-interest expense ratios. During the nine months ended September 30, 2010, we repaid $2.8 million on this facility.
Liberty Bank Facility. During the nine months ended September 30, 2010, we pledged $27.6 million of VOI notes receivable to this facility and received cash proceeds of $26.9 million. We also made repayments of $14.3 million on the facility during the first nine months of 2010.
BB&T Purchase Facility. On September 2, 2010, the BB&T Purchase Facility was amended and restated, extending the revolving advance period under the facility to August 31, 2011. The facility limit will initially revolve up to $125.0 million. Should a takeout financing (as defined in the applicable facility agreements) occur prior to August 31, 2011, the facility limit will decrease to $50.0 million. The BB&T Purchase Facility provides for the financing of our
timeshare receivables at an advance rate of 67.5%, subject to the terms of the facility. The advance rate on prospective advances will decrease to 65% once the outstanding balance under the BB&T Purchase Facility is equal to or greater than $100.0 million but less than $110.0 million, and will further decrease to 62.5% when the outstanding balance is equal to or greater than $110.0 million. While ownership of the receivables is transferred for legal purposes, the transfers of receivables under the facility are accounted for as secured borrowings. Accordingly, the receivables are reflected as assets and the associated obligations are reflected as liabilities on our balance sheet. The BB&T Purchase Facility is nonrecourse and is not guaranteed by us. As of September 30, 2010, the outstanding balance on the BB&T Purchase Facility was 77.9% of the associated collateral. We will continue to equally share with BB&T in the excess cash flows generated by the receivables sold, after customary payments of fees, interest and principal, until the outstanding balance reduces to 67.5% of the associated collateral as the outstanding balance amortizes, at which point we will receive 100% of the excess cash flows from the receivables sold.
The interest rate on the BB&T Purchase Facility is currently the Prime Rate plus 3.5% (6.75% as of September 30, 2010), but is subject to increase to the Prime Rate plus 4.5% once the outstanding balance under the BB&T Purchase Facility is equal to or greater than $100.0 million but less than $110.0 million, and will further increase to the Prime Rate plus 5.5% when the outstanding balance is equal to or greater than $110.0 million.
In this private placement transaction, BXG Legacy 2010 LLC, a wholly-owned special purpose subsidiary of Bluegreen, issued $27.0 million of notes payable secured by a portfolio of timeshare receivables totaling $36.1 million. The notes have a coupon rate of 12% and were sold at a $2.7 million discount to yield an effective rate of 18.5%. The sale of the notes generated gross proceeds to Bluegreen of $24.3 million (before fees and customary reserves and expenses), which were used to repay a portion of the outstanding balance under the BB&T Purchase Facility.
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