Option One Loses Warehouse Facility

Option One Mortgage Corp., Irvine, Calif., has lost a warehouse facility with Lehman Brothers Bank, Wilmington, Del., which leaves the company close to the minimum capacity specified as a closing condition of its sale by current owner H&R Block, Kansas City Mo., to an affiliate of Cerberus Capital Management, New York.The terms of the deal require Option One to have $8 billion in warehouse capacity, including $2 billion in uncommitted capacity. According to a Securities and Exchange Commission 8-K filing by Block in which the loss of the line was disclosed, Option One has $8.002 billion in committed capacity, as well as $2 billion in uncommitted capacity. The Lehman line, which expired on July 31, was for $1.5 billion, based on information gleaned from Block's 10-K filing. To make up some of the lost capacity, Block has entered into an agreement with Bank of America, Charlotte, N.C., to extend a line issued by that company to June 12, 2008. The line of $2.002 billion has been temporarily increased to $2.252 billion through Oct. 31, 2007, or the closing date of the Cerberus deal, whichever comes first. Option One can be found online at http://www.optiononemortgage.com.