Debt |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 11. Debt Our outstanding debt obligations included the following as of December 31, 2019 and 2018 (in thousands):
(1) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes. Issuance of Initial 6.750% Senior Notes Due 2027 In May 2019, we completed a private offering of $500.0 million aggregate principal amount of the Company’s Initial 6.750% Senior Notes due 2027 (which we refer to as the “Initial Notes due 2027”) in reliance on Rule 144A and Regulation S under the Securities Act of 1933 (which we refer to as the “Securities Act”). The Initial Notes due 2027 were issued under the Indenture, dated as of May 23, 2019, among the Company, our subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee (which we refer to as the “May 2019 Indenture,” as it may be supplemented or amended from time to time). The Initial Notes due 2027 were issued at 100% of their principal amount and we received net proceeds of $493.9 million. The Initial Notes due 2027 contain certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the Initial Notes due 2027 is due June 2027, with interest only payments due semi-annually in June and December of each year, beginning on December 1, 2019. In connection with this issuance, the Company deferred $6.1 million of issuance costs, which is presented in notes payable in the consolidated balance sheet. Exchange Offer for 6.750% Senior Notes Due 2027 On January 10, 2020, we commenced an exchange offer (which we refer to as the “Exchange Offer”) on the previously issued Initial Notes Due 2027 for 6.750% Senior Notes Due 2027 (which we refer to as the “Exchange Notes due 2027” or the “6.750% Senior Notes due 2027”) which were identical in all material respects to the Initial Notes due 2027, except that the Exchange Notes due 2027 are registered under the Securities Act and the transfer restrictions, registration rights, and additional interest provisions applicable to the Initial Notes due 2027 do not apply to the Exchange Notes due 2027. The Exchange Offer is scheduled to expire at 5:00 P.M., New York City time, on the evening of February 14, 2020, unless extended by us. 5.875% Senior Notes Due 2025 In May 2017, we completed a private offering of $400 million in aggregate principal amount of our 5.875% Senior Notes due 2025 (which we refer to as the “Initial Notes due 2025”) in reliance on Rule 144A and Regulation S under the Securities Act. The May 2017 Senior Notes were issued under the Indenture, dated as of May 12, 2017, among the Company, our subsidiary guarantors party thereto, and U.S Bank National Association, as trustee (which we refer to as the “May 2017 Indenture,” as it may be supplemented or amended from time to time). The Initial Notes due 2025 were issued at a price equal to 100.00% of their principal amount, and we received net proceeds of approximately $395.5 million. In December 2017, we completed an offer to exchange approximately $400.0 million in aggregate principal amount of our Initial Notes due 2025, which are registered under the Securities Act (which we refer to as the “Exchange Notes due 2025”), for an equivalent amount of the Initial Notes due 2025 that were tendered and accepted for exchange. The terms of the Exchange Notes due 2025 are identical in all material respects to the Initial Notes due 2025, except that the Exchange Notes due 2025 are registered under the Securities Act and the transfer restrictions, registration rights, and additional interest provisions that are applicable to the Initial Notes due 2025 do not apply to the Exchange Notes due 2025. The Initial Notes due 2025 and Exchange Notes due 2025 (which we refer to collectively, as the “Existing Notes due 2025”) will be treated as a single series of notes under the May 2017 Indenture, and will vote as a single class of notes for all matters submitted to a vote of holders under the May 2017 Indenture. The Existing Notes due 2025 are unsecured senior obligations which are guaranteed on an unsecured senior basis by certain of our current and future subsidiaries. The May 2017 Indenture governing the Existing Notes due 2025 contains certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the Existing Notes due 2025 is due July 2025, with interest only payments due semi-annually in January and July of each year. As of December 31, 2019, the aggregate obligation, inclusive of unamortized financing costs on the Existing Notes due 2025 was $396.1 million. 6.875% Senior Notes Due 2022 From May 2014 through January 2017, we completed three private offerings totaling $385.0 million in aggregate principal amount of our 6.875% Senior Notes due 2022 (the “Notes due 2022”), under the Securities Act. The Notes due 2022 were issued under the Indenture, dated as of May 5, 2014, among the Company, our subsidiary guarantors party thereto, and U.S Bank National Association, as trustee (which we refer to as the “May 2014 Indenture”). The Notes due 2022 were unsecured senior obligations which were guaranteed on an unsecured senior basis by certain of our current and future subsidiaries. The May 2014 Indenture governing the Notes due 2022 contained certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the 2022 Notes was due May 2022, with interest only payments due semi-annually in May and November of each year. Extinguishment of 6.875% Senior Notes Due 2022 During the year ended December 31, 2019, the Company extinguished $385.0 million in outstanding principal of our Notes due 2022. The extinguishment was the result of two separate transactions whereby a tender offer validly tendered $189.3 million of the Notes due 2022 on March 23, 2019 and the remaining $195.7 million was redeemed in accordance with the Indenture agreement on June 10, 2019. The transaction resulted in a loss of $10.8 million, which is presented in loss on debt extinguishment in the consolidated statement of operations for the year ended December 31, 2019. Revolving Line of Credit On October 21, 2014, we entered into a Credit Agreement with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, and the lenders from time to time party thereto. On June 5, 2018, we entered into an Amended and Restated Credit Agreement which amended and restated the Credit Agreement. The Amended and Restated Credit Agreement provided us with a revolving line of credit of up to $540.0 million, and unless terminated earlier, matured on April 30, 2022. Under the terms of the Amended and Restated Credit Agreement we were entitled to request an increase in the size of the credit facility by an amount not exceeding $100.0 million. On June 28, 2018, we entered into a Joinder Agreement which increased the credit facility to $590.0 million by exercising $50.0 million of the $100.0 million accordion feature and added a new lender. On February 12, 2019, we entered into a Joinder Agreement which increased the credit facility to $640.0 million by exercising the final $50.0 million of the $100.0 million accordion feature and added a new lender.
On December 13, 2019, the Company entered into a First Modification Agreement (the “First Modification Agreement”) with the lenders party thereto, to the Amended and Restated Credit Agreement, which extends the maturity date, unless terminated earlier, of the credit agreement to April 30, 2023 and entitles the Company to request an increase in the size of the credit facility by an amount not exceeding $110.0 million. If the existing lenders elect not to provide the full amount of a requested increase, we may invite one or more other lender(s) to become a party to the First Modification Agreement, subject to the approval of the Administrative Agent. Under the terms of the First Modification Agreement, we are able to request a twelve-month extension of the maturity date. Our obligations under the First Modification Credit Agreement are guaranteed by certain of our subsidiaries. The First Modification Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default. These covenants are measured as defined in the First Modification Agreement and are reported to the lenders quarterly.
Borrowings under the First Modification Agreement continue to bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.60% and 3.10% per annum, or, in the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.60% and 2.10% per annum.
As of December 31, 2019, we had $68.7 million outstanding under the credit facility and were in compliance with all covenants.
Mortgage Repurchase Facilities – Financial Services
On May 4, 2018, September 14, 2018 and August 1, 2019, Inspire entered into mortgage warehouse facilities, with Comerica Bank, J.P. Morgan and Wells Fargo, respectively. The mortgage warehouse lines of credit (which we refer to as the “Repurchase Facilities”) provide Inspire with uncommitted repurchase facilities of up to $275 million as of December 31, 2019, secured by the mortgage loans financed thereunder. On September 15, 2019 Inspire amended the Master Repurchase Agreement, which provided $100.0 million of availability through December 15, 2019 and $150.0 million from December 16, 2019 through January 31, 2020. As of December 31, 2019, Inspire had total capacity under the Repurchase Facilities of $275.0 million of which $174.1 million was outstanding. Amounts outstanding under the Repurchase Facilities are not guaranteed by us or any of our subsidiaries and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of December 31, 2019 and 2018, we had $174.1 million and $104.6 million outstanding under these Repurchase Facilities, respectively, and were in compliance with all covenants thereunder. No assurance can be provided, however, that we will remain in compliance with the covenants or have continued access to these facilities or substitute or replacement facilities in an amount sufficient to fund our mortgage lending business. During the years ended December 31, 2019 and 2018, we incurred interest expense on our Repurchase Facilities of $2.7 million and $1.4 million, respectively, which are included in financial services costs on our consolidated statements of operations. Other Financing Obligations As of December 31, 2019, we had $3.0 million of outstanding land development notes and $3.3 million of outstanding insurance premium notes, compared to $2.3 million of outstanding land development notes and $6.5 million outstanding insurance premium notes for the year ended December 31, 2018.
Aggregate annual maturities of debt as of December 31, 2019 are as follows (in thousands):
|