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Pulte Homes was just upgraded by several sell side banks. I disagree wholeheartedely with this, and maintain a bearish stance on the whole industry. Macro conditions are the worst they have ever been and lenders are now suffering to the point that they are reeling in credit by the spindleful. In the next few posts, I will fully illustrate why 2008 will be the year that the banks lose patience with the builders. I have spend the last week writing code to scour the inventory of the banks and attempt to mark it to market. It looks ugly, and the word insolvency is flying through the air. This from Pulte's latest 8K.

 On February 1, 2008, Pulte Mortgage LLC (the “Company”) entered into an Eighth Omnibus Amendment (the “Amendment”) to its asset-backed commercial paper program. The Amendment was entered into by and among the Company, the lenders, administrative agent, and others listed therein, with Calyon New York Branch serving as Administrative Agent. The Amendment provides the participating banks with an optional maturity date acceleration if any of Moody’s Investors Service, Standard and Poor’s Corporation, or Fitch Ratings rate any of the Company’s senior unsecured debt at or below Ba2, BB, or BB, respectively. Total capacity has also been decreased to $150 million from $300 million.
A copy of the Eighth Amendment is filed as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference.
 

Centex's lenders are also getting antsy, and they have Centex paying for waivers...

Item 1.01. Entry into a Material Definitive Agreement.
Centex Corporation (the “Company”) does not view the Waiver (referred to in Item 8.01) as a material amendment to the Credit Agreement (referred to in Item 8.01) within the meaning of Item 1.01 of Form 8-K. If it is determined, however, that the Waiver is a material amendment to such Credit Agreement within the meaning of Item 1.01, the text of Item 8.01 describing the Waiver is incorporated by reference herein.
Item 8.01. Other Events.
On January 28, 2008, Centex Corporation (the “Company”) announced earnings for its fiscal quarter ended December 31, 2007. In its press release the Company announced that, during its fiscal third quarter, the Company recorded a non-cash charge of $500 million to establish a valuation allowance (the “Valuation Allowance”) related to its deferred tax assets in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” The Valuation Allowance was reflected as a charge to income tax expense and a reduction of the Company’s deferred tax assets. Exclusive of the impact of recording the Valuation Allowance, the Company was in compliance at December 31, 2007 with the debt covenants contained in its July 1, 2005 multi-bank revolving credit agreement, as amended (the “Credit Agreement”).
On January 28, 2008, prior to the issuance of the press release, the Company obtained a waiver (the “Waiver”) from the banks under the Credit Agreement in accordance with the procedures for obtaining a waiver and paid the banks a fee. Pursuant to the Waiver, the banks waived solely with respect to the quarter ended December 31, 2007 any non-compliance with the Leverage Ratio and Minimum Tangible Net Worth covenants contained in the Credit Agreement arising solely as a result of the Valuation Allowance, and any potential default or event of default relating to any such non-compliance. With the Waiver, at December 31, 2007, the Company was in compliance with its financial covenants under the Credit Agreement.
The Company plans to seek in the fourth quarter an amendment to the Credit Agreement that will include modifications to the financial covenants to address the effect of valuation allowances related to deferred tax assets in accordance with SFAS No. 109.