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February 6, 2009

Forest City Clarifies Waiver Related to Corporate Line of Credit

PR Newswire

CLEVELAND, Feb. 5 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA; FCEB) today confirmed that it has received a waiver from its 14-member bank group related to the Company's corporate line of credit. The need for the waiver was triggered by an unintentional non-compliance with one of the non-financial covenants of the line of credit which occurred when the Company purchased $15 million face value of its Puttable Equity-Linked Senior Notes at a cost of approximately $10.6 million.

Commenting on the events leading to the waiver, Forest City president and chief executive officer Charles A. Ratner said, "We saw the opportunity to purchase these notes at a discount as a prudent business decision, and we believed the purchase, which occurred during the Company's fiscal 2008 third quarter, was in compliance with our credit agreement. In subsequent review with our lenders after the close of the third quarter, it was determined that the transaction was not in compliance with one of the non-financial covenants of the line. As a result, we immediately entered into discussions to obtain a waiver to allow the transaction, and reached agreement in less than one week with members of the group.

"It is gratifying that our lenders understood that the noncompliance was unintentional and responded with good-faith discussions that allowed us to promptly secure the needed waiver," Ratner added.

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From Reuters, via Forbes.com, BRIEF-Forest City gets waiver from bank group

Posted by lumi at February 6, 2009 5:32 AM