Note 14 - Senior Notes Payable

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Long-term Debt [Text Block]

14.      Senior Notes Payable

Senior notes payable consisted of the following at:

	September 30,		December 31,
	2015		2014
	(Dollars in thousands)
7% Senior Notes due August 2015	$	―	$	29,789
10—% Senior Notes due September 2016, net of discount		275,707		272,684
8⅜% Senior Notes due May 2018, net of premium		577,629		578,278
8⅜% Senior Notes due January 2021, net of discount		397,876		397,642
6¼% Senior Notes due December 2021		300,000		300,000
5⅞% Senior Notes due November 2024		300,000		300,000
1¼% Convertible Senior Notes due August 2032		253,000		253,000
	$	2,104,212	$	2,131,393

The senior notes payable described above are all senior obligations and rank equally with our other existing senior indebtedness and, with the exception of our 1.25% Convertible Senior Notes, are redeemable at our option, in whole or in part, pursuant to a "make whole" formula. These notes contain various restrictive covenants.  Our 10.75% Senior Notes due 2016 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, stock repurchases 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 indentures).  As of September 30, 2015, 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") guarantee our outstanding senior notes. The guarantees are full and unconditional, and joint and several. The indentures further provide that a Guarantor Subsidiary will be released and relieved of any obligations under its note guarantee in the event (i) of a sale or other disposition (whether by merger, stock purchase, asset sale or otherwise) of a Guarantor Subsidiary to an entity which is not CalAtlantic Group, Inc. or a Guarantor Subsidiary; (ii) the requirements for legal defeasance or covenant defeasance have been satisfied; (iii) a Guarantor Subsidiary ceases to be a restricted subsidiary as the result of the Company owning less than 80% of such Guarantor Subsidiary; (iv) a Guarantor Subsidiary ceases to guarantee all other public notes of the Company; or (v) a Guarantor Subsidiary is designated as an Unrestricted Subsidiary under the indentures for covenant purposes. Please see Note 21 for supplemental financial statement information about our guarantor subsidiaries group and non-guarantor subsidiaries group.

The 1¼% Convertible Senior Notes due 2032 (the "Convertible Notes") 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, after giving effect to the 1-for- 5 reverse stock split, at a conversion rate of 24.7532 shares of common stock per $1,000 principal amount of Convertible Notes (which is equal to a conversion price of approximately $40.40 per share), subject to adjustment. On or after August 5, 2017, 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.

We repaid the remaining $29.8 million principal balance of our 7% Senior Notes upon maturity in August 2015.

All of the Company’s senior notes remained outstanding after the October 1, 2015 closing of the Company’s Merger with Ryland. In addition, all of Ryland’s senior notes, totaling $1.3 billion in aggregate principal amount as of October 1, 2015, remained outstanding following the merger. As required by the applicable note indentures, the Company and certain former Ryland and Company subsidiaries entered into supplemental indentures and guarantees pursuant to which the Company affirmed its assumption of Ryland Group, Inc.’s obligations under the Ryland senior notes, former Ryland subsidiaries that guaranteed the Ryland senior notes agreed to guarantee the Company’s senior notes and Company subsidiaries that guaranteed the Company’s senior notes agreed to guarantee the Ryland senior notes. The guarantees are unsecured obligations of each subsidiary, ranking equal in right of payment with all such subsidiary’s existing and future unsecured and unsubordinated indebtedness. Interest on each series of notes is payable semi-annually. Each of the Company senior notes and Ryland senior notes rank equally with all of the Company’s other unsecured and unsubordinated indebtedness.