Note 6 - Homebuilding Indebtedness

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

6. Homebuilding Indebtedness

a. Letter of Credit Facilities

As of December 31, 2013, we were party to three committed letter of credit facilities totaling $26 million, of which $4.0 million was outstanding. These facilities require cash collateralization and have maturity dates ranging from October 2014 to October 2016. In addition, as of such date, we also had $16.7 million outstanding under an uncommitted letter of credit facility. As of December 31, 2013 these facilities were secured by cash collateral deposits of $21.0 million. Upon maturity, we may renew or enter into new letter of credit facilities with the same or other financial institutions.

b. Senior Notes Payable

Senior notes payable consist of the following at:

	December 31,
	2013		2012
	(Dollars in thousands)
6¼% Senior Notes due April 2014	$	4,971	$	4,971
7% Senior Notes due August 2015		29,789		29,789
10¾% Senior Notes due September 2016, net of discount		269,046		265,823
8⅜% Senior Notes due May 2018, net of premium		579,085		579,832
8⅜% Senior Notes due January 2021, net of discount		397,353		397,087
6¼% Senior Notes due December 2021		300,000	―
1¼% Convertible Senior Notes due August 2032		253,000		253,000
	$	1,833,244	$	1,530,502

In September 2009, we issued $280 million of 10.75% Senior Notes due September 15, 2016 (the “2016 Notes”). These notes were issued at a discount to yield approximately 12.50% under the effective interest method and have been reflected net of the unamortized discount in the accompanying consolidated balance sheets.

In May 2010, we issued $300 million of 8.375% Senior Notes due May 15, 2018 (the “2018 Notes”). In December 2010, we issued an additional $275 million of 2018 Notes (issued at a premium to yield approximately 7.964% under the effective interest method) and $400 million of 8.375% Senior Notes due January 15, 2021 (issued at a discount to yield approximately 8.50% under the effective interest method), which have been reflected net of their unamortized premium and discount, respectively, in the accompanying consolidated balance sheets.

In August 2013, we issued $300 million in aggregate principal amount of 6.25% Senior Notes. These notes were issued at par and mature on December 15, 2021.

In July 2012, we issued $253 million of 1.25% Convertible Senior Notes due 2032 (the “Convertible Notes”). The Convertible Notes are senior unsecured obligations of the Company and are guaranteed by the guarantors of our other senior notes on a senior unsecured basis. The Convertible Notes bear interest at a rate of 1.25% and will mature on August 1, 2032, unless earlier converted, redeemed or repurchased. The holders may at any time convert their Convertible Notes into shares of the Company's common stock at an initial conversion rate of 123.7662 shares of common stock per $1,000 principal amount of Convertible Notes (which is equal to an initial conversion price of approximately $8.08 per share), subject to adjustment. The Company may not redeem the Convertible Notes prior to August 5, 2017. On or after August 5, 2017 and prior to the maturity date, the Company may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes being redeemed. On each of August 1, 2017, August 1, 2022 and August 1, 2027, holders of the Convertible Notes may require the Company to purchase all or any portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased.

Our senior notes payable are all senior obligations and rank equally with our other existing senior indebtedness and, with the exception of our Convertible Notes, are redeemable at our option, in whole or in part, pursuant to a “make whole” formula. These notes contain various restrictive covenants.  Our 2016 Notes contain our most restrictive covenants, including a limitation on additional indebtedness and a limitation on restricted payments.  Outside of the specified categories of indebtedness that are carved out of the additional indebtedness limitation (including a carve-out for up to $1.1 billion in credit facility indebtedness), the Company must satisfy at least one of two conditions (either a maximum leverage condition or a minimum interest coverage condition) to incur additional indebtedness.  The Company must also satisfy at least one of these two conditions to make restricted payments.  Restricted payments include dividends and investments in and advances to our joint ventures and other unrestricted subsidiaries.  Our ability to make restricted payments is also subject to a basket limitation (as defined in the indenture).  As of December 31, 2013, we were able to incur additional indebtedness and make restricted payments because we satisfied both conditions. Many of our 100% owned direct and indirect subsidiaries (collectively, the “Guarantor Subsidiaries”) guaranty our outstanding senior notes. The guarantees are full and unconditional, and joint and several. Please see Note 16 for supplemental financial statement information about our guarantor subsidiaries group and non-guarantor subsidiaries group.

c. Secured Project Debt and Other Notes Payable

Our secured project debt and other notes payable consist of seller non-recourse financing and community development district and similar assessment district bond financings used to finance land acquisition, development and infrastructure costs for which we are responsible. At December 31, 2013 and 2012, we had approximately $6.4 million and $11.5 million, outstanding, respectively, in secured project debt and other notes payable.

d. Borrowings and Maturities

The principal amount of maturities of senior and convertible senior notes payable, and secured project debt and other notes payable are as follows:

	Year Ended December 31,
	(Dollars in thousands)
2014	$	8,631
2015		30,772
2016		280,819
2017		658
2018		575,231
Thereafter		953,000
Total principal amount		1,849,111
Less: Net (discount) premium		(9,516	)
Total homebuilding debt	$	1,839,595

The weighted average interest rate of our borrowings outstanding under our revolving credit facility, bank term loans, senior and convertible senior notes payable, secured project debt and other notes payable as of December 31, 2013, 2012 and 2011, was 7.4%, 7.6%, and 8.9%, respectively.

e. Revolving Credit Facility

As of December 31, 2013, we were party to a $470 million unsecured revolving credit facility (the “Revolving Facility”), of which $440 million matures in October 2015 and $30 million matures in February 2014. Upon maturity of Tranche B of the revolver on February 28, 2014, our total aggregate commitment will be reduced to $440 million. During the 2013 third quarter, we amended the Revolving Facility to, among other things, eliminate the borrowing base and modify the mandatory repayment requirement. The Revolving Facility has an accordion feature under which the aggregate commitment may be increased subject to the availability of additional bank commitments and certain other conditions. As of December 31, 2013, the Revolving Facility contained financial covenants, including, but not limited to, (i) a minimum consolidated tangible net worth covenant; (ii) a covenant to maintain either (a) a minimum liquidity level or (b) a minimum interest coverage ratio; (iii) a maximum net homebuilding leverage ratio and (iv) a maximum land not under development to tangible net worth ratio. This facility also contains a limitation on our investments in joint ventures. Interest rates charged under the Revolving Facility include LIBOR and prime rate pricing options. As of December 31, 2013 we satisfied the conditions that would allow us to borrow up to $470 million under the facility and had no amounts outstanding.