Note 12 - Revolving Credit Facility and Letter of Credit Facilities

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Line of Credit Facility [Text Block]

1

2.

     

Revolving Credit Facility and Letter of Credit Facilities

As of

September 30, 2017,

we were party to a

$750

million unsecured revolving credit facility,

$350

million of which is available for letters of credit, which matures in

October 2019.

The facility has an accordion feature under which the Company

may

increase the total commitment up to a maximum aggregate amount of

$1.2

billion, subject to certain conditions, including the availability of additional bank commitments. Interest rates, as defined in the credit agreement, approximate (i) LIBOR (approximately

1.24%

at

September 30, 2017)

plus

1.75%,

or (ii) Prime (

4.25%

at

September 30, 2017)

plus

0.75%.

In addition to customary representations and warranties, the facility contains financial and other covenants, including a minimum tangible net worth requirement of

$1.65

billion (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), a net homebuilding leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding

2.00

to

1.00

and a land covenant that limits land

not

under development to an amount

not

to exceed tangible net worth. The Company is also required to maintain either (a) a minimum liquidity level (unrestricted cash in excess of interest incurred for the previous

four

quarters) or (b) a minimum interest coverage ratio (EBITDA to interest expense, as defined therein) of at least

1.25

to

1.00.

We were in compliance with all of the

revolving facility covenants as of

September 30, 2017.

The revolving facility also limits, among other things, the Company’s investments in joint ventures and the amount of the Company’s common stock that the Company can repurchase.

On

September 30, 2017,

we had

$295.6

million outstanding under the facility and the Company had outstanding letters of credit issued under the facility totaling

$119.2

million, leaving

$335.2

million available under the facility to be drawn.

As of

September 30, 2017,

in addition to our

$350

million letter of credit sublimit under our revolving facility, we were party to

four

committed homebuilding letter of credit facilities totaling

$48.0

million, of which

$22.4

million was outstanding. These facilities require cash collateralization and have maturity dates ranging from

October 2018

to

August 2020.

As of

September 30, 2017,

these facilities were secured by cash collateral deposits of

$22.8

million. Upon maturity, we

may

renew or enter into new letter of credit facilities with the same or other financial institutions.