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It's time to let you in on a dirty little secret: You may not own the stock you own. That's right, if you invest with a brokerage firm, the shares you bought are almost certainly not held in your name. Technically, they're held in the name of the Wall Street firm you do business with, hence the term "street name."
No, you haven't been robbed. Ultimately, the decision to hold shares on the books under a different name doesn't affect the economic ramifications for you. You¿re listed as the "beneficial owner," even though the firm is the official owner of the shares. But, you are giving up some rights, and investors concerned about good corporate governance might want to get that stock back in their own names.
Here's the problem: If your stock is technically owned by, say, Merrill Lynch, then Merrill Lynch gets to do things with it that might work against your wishes. Take short selling. Investors who want to sell shares short need to first borrow those shares. The lenders are often the big Wall Street firms that are handing out Street-name shares. So, if you feel that a company you own is a victim of aggressive short selling, chances are your own shares are being used to fuel the shorting.
Also, your brokerage firm can cast ballots on some corporate matters affecting a company without getting your input. Technically, this can only happen in votes considered ¿routine¿ by securities regulators. But, there's a big catch: some big events, like board elections, are considered "routine" under law.
The good news is that you can easily fix the Street name problem: Just request that your brokerage firm makes you the listed owner of the shares. If they refuse, find a new firm.
Home / Markets / Industries / Real Estate
Tuesday, July 08, 2008
WCI Communities Inc. Announces Exchange Offer For 4.0% Contingent Convertible Senior Subordinated Notes Due 2023
Comtex
BONITA SPRINGS, Fla., Jul 8, 2008 (PrimeNewswire via COMTEX) ----WCI Communities, Inc. ("WCI" or the "Company") (NYSE:WCI) today announced that it has commenced an exchange offer for all of its outstanding $125.0 million 4.0% Contingent Convertible Senior Subordinated Notes due 2023 (the "Outstanding Notes"). WCI is offering to exchange $1,000 principal amount of new 16% senior secured notes due 2013 (the "New Notes") for each $1,000 principal amount of the Outstanding Notes.
The exchange offer will expire at 12:00 midnight EDT on August 4, 2008, unless extended or terminated by the Company. Tendered notes may be withdrawn at any time prior to 12:00 midnight on the expiration date. The Company urges investors and security holders to read its exchange offer materials, including the offering memorandum, Schedule TO and related materials because they contain important information about the exchange offer. Investors and security holders may obtain the offering memorandum and related materials through the exchange agent for the exchange offer, The Bank of New York Mellon Trust Company, N.A., at:
The Bank of New York Mellon Trust Company, N.A. 101 Barclay Street - 7 East New York, NY 10286 Attention: David Mauer Telephone: (212) 815-3687 Facsimile: (212) 298-1915
The exchange offer is being made pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. No commission or other remuneration will be paid or given, directly or indirectly, by WCI for solicitation of acceptance of the exchange offer.
The consummation of the exchange offer is subject to certain customary conditions, including a 95% minimum tender condition, which means that at least 95% of the aggregate principal amount outstanding of the notes must have been validly tendered and not withdrawn. The exchange offer is also conditioned on the amendment and restatement of the Company's existing credit facilities and issuance of new second lien notes. No assurances can be given that the Company will be successful in entering into an amendment and restatement of the Company's existing credit facilities or issuing new second lien notes, in each case on satisfactory terms or at all. Subject to applicable law, WCI may, in its sole discretion, waive any condition applicable to the exchange offer or extend or terminate or otherwise amend the exchange offer.
This news release is neither an offer to sell nor the solicitation of an offer to buy securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. The exchange offer may be made only pursuant to the terms of an offering memorandum, letter of transmittal and related exchange offer materials which are being sent to holders of the Outstanding Notes and have been filed with the Securities and Exchange Commission as part of WCI's Tender Offer Statement on Schedule TO. Holders of the Outstanding Notes are encouraged to review the offering documents carefully before making any decision with respect to the exchange offer because they contain important information. WCI is not making any recommendation to holders of the Outstanding Notes as to whether they should tender any Outstanding Notes pursuant to the exchange offer. The Schedule TO, the offering memorandum, the letter of transmittal and other related exchange offer documents are available free of charge, at the website of the Securities and Exchange Commission at www.sec.gov. In addition, the Company will provide copies of the Schedule TO and related documents upon request free of charge to holders of its Outstanding Notes.
About WCI
WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The Company offers traditional and tower home choices with prices from the high-$100,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The Company currently owns and controls developable land on which the Company plans to build over 15,000 traditional and tower homes.
The WCI Communities, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3018
For more information about WCI and its residential communities visit www.wcicommunities.com
Click here to join our email list: http://www.b2i.us/irpass.asp?BzID=631&to=ea&s=0
Forward-Looking Statement
Certain information included herein and in other company reports, Securities and Exchange Commission filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the company's anticipated operating results, financial resources, ability to acquire land, ability to sell homes and properties, ability to deliver homes from backlog, and ability to secure materials and subcontractors. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other company reports, filings, statements and presentations. These risks and uncertainties include WCI's ability to compete as a going concern in real estate markets where we conduct business; WCI's ability to pay principal and interest on its current and future debts; WCI's ability to amend its bank agreements and obtain waivers as needed from time to time to obtain covenant relief and to avoid bank defaults during the market downturn; WCI's ability to maintain or increase historical revenues and profit margins; WCI's ability to collect contract receivables from buyers purchasing homes as investments; the availability and cost of land in desirable areas in its geographic markets and our ability to expand successfully into those areas; WCI's ability to obtain necessary permits and approvals for the development of its lands; the availability of capital to WCI and our ability to effect growth strategies successfully; availability of labor and materials and material increases in insurance, labor and material costs; increases in interest rates and availability of mortgage financing; the ability of prospective residential buyers to obtain mortgage financing due to tightening credit markets, appraisal problems or other factors; increases in construction and homeowner insurance and availability of insurance, the continuing negative buyer sentiment and erosion of consumer confidence; the negative impact of claims for contract rescission or increasing cancellation rates by contract purchasers; the negative impact if certain Watermark purchasers elect to rescind their contracts to the extent they are entitled to any rescission rights; adverse legislation or regulations; adverse legal proceedings; the ability to retain employees; changes in generally accepted accounting principles; natural disasters; adverse weather conditions; and changes in general economic, real estate and business conditions and other factors over which the company has little or no control. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company's actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.
This news release was distributed by PrimeNewswire, www.primenewswire.com
SOURCE: WCI Communities, Inc.
WCI Communities, Inc. Investor Contact: Ernest Scheidemann (239) 498-8318 ernestscheidemann@wcicommunities.com
(C) Copyright 2008 PrimeNewswire, Inc. All rights reserved. ********************************************************************** As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a DOWNTREND on 03-04-2008 for WCI @ $3.49. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.
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