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Accredited Home Lenders Receives $200 Million Loan Commitment From Farallon Capital Management, LLC.


Accredited Home Lenders Holding Co. (NASDAQ:LEND) (“Accredited” or “Company”) has announced that it has received a commitment for a $200 million term loan from one or more entities managed by Farallon Capital Management(R), L.L.C. (“Farallon”). Farallon manages equity capital for institutions and high net worth individuals and is headquartered in San Francisco, California. Farallon is a registered investment advisor with the United States Securities and Exchange Commission.

The proceeds of the loan can be used for general working capital, the funding of mortgage loans and other corporate needs. The loan has a five-year term, an interest rate of 13% per year, and may be repaid by Accredited at any time over the life of the loan, subject to certain conditions and prepayment fees. The loan is a secured obligation of Accredited and its subsidiaries.

In connection with the term loan, Accredited will issue Farallon approximately 3.3 million warrants in a private placement, with an exercise price equal to $10 per share. The warrants expire ten years from their issuance date. Farallon will also receive certain preemptive rights to purchase additional equity securities of the Company and certain registration rights with respect to its equity securities in the Company.

The proposed transaction is subject to completion of definitive documentation, receipt of required third party and governmental consents and licenses, and certain other conditions.

The term loan when funded and the sale of $2.7 billion of mortgage loans announced on March 15, 2007, comprise part of the Company’s strategic steps to enhance liquidity. The Company will continue to consider other strategic options and has retained a financial advisor to assist in these evaluations.


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