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Steve Lapper

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Textron NLE??
« on: December 24, 2008, 10:12:40 AM »
This week, Textron announced their withdrawal and liquidation of all of Textron Financial Corp, save for those finance lines that assist purchases of Textron products.

Textron (maker of EZ-GO Carts) has traditionally been the single largest golf-course specific lender (GE Capital and GMAC have long since withdrawn from this market). Textron will surely continue to finance the leasing and purchase programs for the cart biz, but they have hundreds of millions of outstanding course and club loans outstanding.

I don't know any of the specifics, but I think this will have a dramatic impact on the golf industry. New projects and certain renovations will no longer have a dependable lending resource. Existing and outstanding loans, I suspect(?), will be shopped, or packaged then shopped, around. Derivative questions will arise over default rates, etc... further squeezes on private and resort-style clubs?

Anyone out there with any idea of what is being discussed at the borrowers level?
« Last Edit: December 24, 2008, 10:40:16 AM by Steve Lapper »
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Lou_Duran

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Re: Textron NLE??
« Reply #1 on: December 24, 2008, 11:56:52 AM »
Steve,

Does your source have anything to say about Textron's golf course mortage and ORE (owned real estate) portfolios?  These probably are in the many $ 000s.
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Chris Cupit

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Re: Textron NLE??
« Reply #2 on: December 24, 2008, 12:09:33 PM »
Steve,

My loan is with Textron and I have heard nothing.  In fact I was on the phone with them about a week ago discussing a re-finance.  The word I had (both prior to this conversation and confirmed by it) was that Textron had halted all new lendiing for golf projects including re-finances until 1st quarter of 09. 

There has been no mention of a liquidation to their borrowers :o  Maybe we are the last to know?

I will find out.

I do know they did permanently close their marina division about a month ago. 
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Lynn_Shackelford

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Re: Textron NLE??
« Reply #3 on: December 24, 2008, 03:59:07 PM »
Steve
Can you share with us the site for that announcement?
Thanks.
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David_Tepper

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Re: Textron NLE??
« Reply #4 on: December 24, 2008, 04:10:17 PM »
Lynn S. -

Here is the AP report on Textron exiting the finance business. It is not golf specific.

http://finance.yahoo.com/news/Textron-cuts-4Q-outlook-to-apf-13898527.html

DT
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Steve Lapper

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Re: Textron NLE??
« Reply #5 on: December 24, 2008, 04:50:58 PM »
Guys:

 My understanding is that all the loans are "under review" and expected to be packaged (where possible) and offered for sale into their associated marketplaces. This would be a normal preliminary step but does not necessarily mean that such loans will be sold at distressed or impaired levels.

Given that most of the asset-backed and RE debt markets are at near frozen (highly illiquid) levels, I highly doubt that much transactional activity for Textron debt would take place anytime soon. The larger, more severe implications suggest a complete halt for new lending and far more severe terms for re-financing in the near future. Unfortunately, such a debt freeze can throw otherwise solvent golf operations into a liquidity bind. Credit analysts employed at solvent and cash-rich institutions have sharpened their pencils and are seeing a plethora of attractive and better-secured debt to pick through. Traditionally, the golf business has not been a particularly attractive market (save for highly attractive RE and cash-flow asset-backed locations....now maybe a thing of the past???) and have relatively high histories of default. Textron bucked that trend and understood and liquified this market over the past decade. I worry about the future without their participation.

I don't at all wish to be a harbinger of pessimism, but it would be less than prudent not to understand that the removal of the largest and most-active lender in the golf business space will produce considerable impact and possibly ugly consequences for operators.

Hope I am wrong!
« Last Edit: December 24, 2008, 05:30:28 PM by Steve Lapper »
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The conventional view serves to protect us from the painful job of thinking."--John Kenneth Galbraith

goldj

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Re: Textron NLE??
« Reply #6 on: December 24, 2008, 10:53:53 PM »
Does anyone know what courses or facilities were financed by Textron?
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Kevin_Reilly

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Re: Textron NLE??
« Reply #7 on: December 25, 2008, 12:52:22 AM »
I am involved with a company that uses Textron for a small portion of their credit.  They were informed this past week that Textron is exiting the business - that current commitments will be honored, and that there will be a small grace period to find a replacement, but for future business they will not be a source of capital.
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Bruce Leland

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Re: Textron NLE??
« Reply #8 on: December 25, 2008, 01:04:12 AM »
Quote from: goldj on December 24, 2008, 10:53:53 PM
Does anyone know what courses or facilities were financed by Textron?
No specifics but they were a prolific lender to the golf biz mostly to finance cart fleets.
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