Notes Payable |
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | NOTES PAYABLE Revolving Credit Agreement In May 2015, we entered into a Credit Agreement (the “Credit Agreement”) with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent. The Credit Agreement provides for a $225.0 million revolving credit facility, which can be increased upon our request up to $300.0 million, subject to the terms and conditions of the Credit Agreement. The revolving credit facility matures on May 26, 2018. Prior to each annual anniversary of the Credit Agreement, we may request a one year extension of the maturity date. The Credit Agreement is guaranteed by each of our subsidiaries having gross assets equal to or greater than $500,000. Prior to the occurrence of a trigger event under the Credit Agreement, the revolving credit facility will be unsecured except that the facility will be secured by a first priority lien in land held for development, lots under development and/or finished lots with an aggregate land value of at least $35.0 million. As of June 30, 2015, the borrowing base was $225.0 million, of which $162.5 million was outstanding, $3.7 million represents letter of credit assurances, and $58.8 million was available to borrow. Interest on borrowings under the Credit Agreement is paid monthly at LIBOR plus 3.50%. At June 30, 2015, LIBOR was 0.19%. The Credit Agreement contains various financial covenants including a tangible net worth ratio; a leverage ratio; a minimum liquidity amount; and an EBITDA to interest expense ratio. The Credit Agreement also prohibits us from making any investments, other than as permitted under the Credit Agreement. In addition, the Credit Agreement contains various covenants that, among other restrictions, limit the amount of our additional debt. At June 30, 2015, we were in compliance with all of the covenants contained in the Credit Agreement. Convertible Notes In November 2014, we issued $85.0 million aggregate principal amount of our 4.25% Convertible Notes due 2019 (the “Convertible Notes”). The Convertible Notes mature on November 15, 2019 and bear interest at a rate of 4.25%, payable semiannually in May and November. Prior to May 15, 2019, the Convertible Notes will be convertible only upon satisfaction of any of the specified conversion events. On or after May 15, 2019, note holders can convert their Convertible Notes at any time at their option. When issued, the conversion of the Convertible Notes could only be settled in shares of our common stock. On April 30, 2015, our stockholders approved the flexible settlement provisions of the Convertible Notes at our 2015 Annual Meeting of Stockholders, which allows us to elect any combination of cash and shares of our common stock upon the conversion of the Convertible Notes. The initial conversion rate of the Convertible Notes is 46.4792 shares of our common stock for each $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $21.52 per share of our common stock. The conversion rate is subject to adjustments upon the occurrence of specific events. When the Convertible Notes were issued, the fair value of $76.5 million was recorded to notes payable. $5.5 million of the remaining proceeds was recorded to additional paid in capital to reflect the equity component and the remaining $3.0 million of debt issuance cost was recorded as a deferred tax liability. The carrying amount of the Convertible Notes is being accreted to face value over the term to maturity. Notes payable consist of the following (in thousands):
Capitalized Interest Interest activity, including other financing costs and accretion of discount, for notes payable for the periods presented is as follows (in thousands):
Included in interest incurred was amortization of deferred financing costs for notes payable and amortization of Convertible Notes discount of $1.1 million and $0.3 million for the three months ended June 30, 2015 and 2014, respectively, and $2.0 million and $0.3 million for the six months ended June 30, 2015 and 2014, respectively. |