The First American Financial Corporation announces amendment of its $65 million credit facility


The First American Financial Corporation (NASDAQ: FAMR) announced today that its $65 million credit facility has been amended in favor of the company, effective April 29, 1993. A consortium of bankers, led by Chase Manhattan Bank, had refinanced $65 million of corporate debt in April 1992, consisting of $10 million of fixed rate indebtedness and $55 million of variable rate indebtedness. This new amendment provides a reduced interest rate and eliminates or relaxes several restrictive covenants.

The rate on the remaining $46.6 million of variable rate indebtedness, which had been prime plus three-quarters of a percent, can now, at the company's option, be based on LIBOR (London Interbank Offered Rates) plus 2 percent or Chase's prime rate.

"The initial reduction in interest rates will result in an annual interest cost savings of approximately $800,000 based on today's rates," said President Parker S. Kennedy. "In fact, if rates were to remain at this level, we would save more than $2 million over the remaining five-year life of the loan.

"In addition, two of the changes in the covenants are very significant," Kennedy continued. "We have eliminated the mandatory prepayment provision, and we have reduced our investment limitations. For instance, we now have enhanced ability to make significant acquisitions."

The First American Financial Corporation, based in Santa Ana, Calif., is a leading provider of real estate financial services, including title insurance, tax monitoring and home warranty services, to real property buyers and mortgage lenders. The company also operates a trust and banking business in Southern California. The company offers its title services through a network of more than 300 offices and 4,000 agents in all 50 states. It also provides title services abroad in the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and the United Kingdom.


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