Loans Payable, Senior Notes and Mortgage Company Loan Facility

9 Months Ended

Jul. 31, 2020

Loans Payable, Senior Notes, and Mortgage Company Loan Facility

Loans Payable

At July 31, 2020 and October 31, 2019, loans payable consisted of the following (amounts in thousands):


	July 31, 2020		October 31, 2019
Senior unsecured term loan	$	800,000	$	800,000

Loans payable – other	284,934		314,577
Deferred issuance costs	(2,909)		(3,128)
	$	1,082,025	$	1,111,449

Senior Unsecured Term Loan

At July 31, 2020, we had an $800.0 million, five-year senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks that is scheduled to expire on November 1, 2024. At July 31, 2020, the interest rate on borrowings was 1.47% per annum. We and substantially all of our 100%-owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Revolving Credit Facility described below.

Revolving Credit Facility

We have a $1.905 billion, five-year senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks. The Revolving Credit Facility is scheduled to mature on November 1, 2024. We and substantially all of our 100%-owned home building subsidiaries are guarantors under the Revolving Credit Facility.

Under the terms of the Revolving Credit Facility, at July 31, 2020, our maximum leverage ratio, as defined, may not exceed 1.75 to 1.00, and we are required to maintain a minimum tangible net worth, as defined, of no less than approximately $2.15 billion. Under the terms of the Revolving Credit Facility, at July 31, 2020, our leverage ratio was approximately 0.68 to 1.00, and our tangible net worth was approximately $4.62 billion. Based upon the limitations related to our repurchase of common stock in the Revolving Credit Facility, our ability to repurchase our common stock was limited to approximately $3.09 billion as of July 31, 2020. In addition, under the provisions of the Revolving Credit Facility, our ability to pay cash dividends was limited to approximately $2.47 billion as of July 31, 2020.

At July 31, 2020, we had no outstanding borrowings under the Revolving Credit Facility and had approximately $129.3 million of outstanding letters of credit that were issued under the Revolving Credit Facility. At July 31, 2020, the interest rate on borrowings under the Revolving Credit Facility would have been 1.50% per annum.

Loans Payable – Other

“Loans payable – other” primarily represents purchase money mortgages on properties we acquired that the seller had financed and various revenue bonds that were issued by government entities on our behalf to finance community infrastructure and our manufacturing facilities. At July 31, 2020, the weighted-average interest rate on “Loans payable – other” was 4.48% per annum.

Senior Notes

At July 31, 2020, we had seven issues of senior notes outstanding with an aggregate principal amount of $2.67 billion.

Mortgage Company Loan Facility

In October 2017, TBI Mortgage^® Company (“TBI Mortgage”), our wholly owned mortgage subsidiary, entered into a mortgage warehousing agreement (the “Warehousing Agreement”) with a bank to finance the origination of mortgage loans by TBI Mortgage. The Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” In December 2018, the Warehousing Agreement was amended to provide for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the Warehousing Agreement, as amended, provides for an accordion feature under which TBI Mortgage may request that the aggregate commitments under the Warehousing Agreement be increased to an amount up to $150.0 million for a short period of time. In December 2019, the Warehousing Agreement was amended to extend the expiration date on substantially the same terms as the existing agreement. The Warehousing Agreement, as amended, expires on December 4, 2020, and borrowings thereunder bear interest at LIBOR plus 1.90% per annum. At July 31, 2020, the interest rate on the Warehousing Agreement, as amended, was 2.06% per annum.