GSO provides $150m to US homebuilder

GSO’s $150m investment in Beazer Homes will allow the company to tap into the improving US housing market. 

GSO Capital Partners has agreed to provide up to $150 million in debt financing to Beazer Homes, an Atlanta-based homebuilder, according to a statement.

The credit injection will allow Beazer to participate in the US’ expanding housing market through the first quarter of the 2014 fiscal year, thereby growing the homebuilder’s number of housing communities. The move is seen as critical to Beazer’s path-to-profitability plan, Beazer chief executive officer Allan Merrill said in a statement.

“As the housing recovery continues to gain momentum, we are excited to partner with Beazer and extend our land banking business,” said GSO co-founder Doug Ostrover in a statement. “GSO has a long history of working with Beazer, and we have great confidence that the management team is positioning the company well in order to capitalize on the recovery and regain profitability.”

Beazer has posted net losses in income in each of the last four quarters, according to earnings releases. Despite the losses, the company did increase its adjusted EBITDA to $7.7 million in the fourth quarter, a $3.8 million improvement over the previous year.

Beazer’s return to profitability will hinge on the continued improvement of the US housing market, which has grown steadily over the last few months. Approximately 411,000 new homes were sold in February, compared to only 366,000 during the same month last year, according to National Association of Home Builders statistics.

GSO and Beazer had not responded to requests for comment at press time.

GSO, the credit affiliate of The Blackstone Group, closed its Capital Opportunities Fund II on $4 billion last year. The firm will invest the mezzanine vehicle across a variety of strategies in the US and Europe, according to a statement at the time of the close.