Borrowings

As of September 30, 2016 and September 30, 2015, we had the following debt, net of premium/discounts and unamortized debt issuance costs:



(In thousands)	Maturity Date	September 30, 2016			September 30, 2015
8 1/8% Senior Notes	June 2016	$	—		$	170,879
6 5/8% Senior Secured Notes	April 2018	—			300,000
9 1/8% Senior Notes	May 2019	—			235,000
5 3/4% Senior Notes	June 2019	321,393			325,000
7 1/2% Senior Notes	September 2021	198,000			200,000
8 3/4% Senior Notes	March 2022	500,000			—
7 1/4% Senior Notes	February 2023	199,834			200,000
Unamortized debt net premium (discount)		2,362			(3,639		)
Unamortized debt issuance costs		(14,063		)	(11,908		)
Total Senior Notes, net		1,207,526			1,415,332
Term Loan (net of unamortized discount of $880 and unamortized debt issuance costs of $1,451)	March 2018	52,669			—
Junior Subordinated Notes (net of unamortized accretion of $40,903 and $42,970, respectively)	July 2036	59,870			57,803
Cash Secured Loans	November 2017	—			22,368
Other Secured Notes Payable	Various Dates	11,813			20,864
Total debt, net		$	1,331,878		$	1,516,367

As of September 30, 2016, the future maturities of our borrowings were as follows:



Fiscal Year Ended September 30,
(In thousands)
2017	$	25,692
2018	35,160
2019	327,351
2020	3
2021	198,000
Thereafter	800,607
Total	$	1,386,813

Secured Revolving Credit Facility. Our Secured Revolving Credit Facility (the Facility) provides us with working capital and letter of credit capacity. On November 6, 2015, we executed a second amendment (the Second Amendment) to the Facility. The Second Amendment, among other things, increased the maximum aggregate amount of the Facility from $130.0 million to $145.0 million and extended its termination date to January 15, 2018. The Facility continues to be with three lenders. As of September 30, 2016 and September 30, 2015, we had no borrowings outstanding under the Facility.

The Facility allows us to issue letters of credit against the undrawn capacity. Subject to our option to cash collateralize our obligations under the Facility upon certain conditions, our obligations under the Facility are secured by liens on substantially all of our personal property and a significant portion of our owned real property. We also pledged approximately $1.0 billion of inventory assets to the Facility to collateralize potential future borrowings or letters of credit (in addition to the letters of credit already issued under the Facility). As of September 30, 2016, we had $38.2 million letters of credit outstanding under the Facility, leaving us with $106.8 million in remaining capacity. The Facility contains certain covenants, including negative covenants and financial maintenance covenants, with which we are required to comply. As of September 30, 2016, we were in compliance with all such covenants.

Subsequent to September 30, 2016, we executed a third amendment to the Facility (the Third Amendment). The Third Amendment, among other things, extends the termination date of the Facility to February 15, 2019 and increases its capacity from $145.0 million to $180.0 million. For a further discussion of the Third Amendment, refer to Note 22.

Letter of Credit Facilities. We have entered into stand-alone, cash-secured letter of credit agreements with banks to maintain our pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Facility). As of September 30, 2016 and September 30, 2015, we had letters of credit outstanding under these additional facilities of $12.1 million and $14.4 million, respectively, all of which were secured by cash collateral in restricted accounts. The Company may enter into additional arrangements to provide additional letter of credit capacity.

Senior Notes. Our Senior Notes are unsecured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of our significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Facility. Each guarantor subsidiary is a 100% owned subsidiary of Beazer Homes. See Note 19 for further information.

All unsecured Senior Notes rank equally in right of payment with all of our existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness and effectively subordinated to the Company's existing and future secured indebtedness, including indebtedness under the Facility and the term loan (defined below), to the extent of the value of the assets securing such indebtedness. The unsecured Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes. The unsecured Senior Notes are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly-owned subsidiaries party to each applicable Indenture.

The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness and to make certain investments. Compliance with our Senior Note covenants does not significantly impact our operations. We were in compliance with the covenants contained in the indentures of all of our Senior Notes as of September 30, 2016.

In September 2016, we issued and sold $400.0 million aggregate principal amount of 8.75% unsecured Senior Notes due March 2022 at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Soon thereafter, we issued an additional $100.0 million "tack on" aggregate principal amount of 8.75% unsecured Senior Notes due March 2022 at a premium of 104.25, for a total issuance of $500.0 million (collectively, the 2022 Notes). Interest on the 2022 Notes is payable semi-annually, beginning on March 15, 2017. The 2022 Notes will mature on March 15, 2022. We may redeem the 2022 Notes at any time prior to March 15, 2019, in whole or in part, at a redemption price equal to 100% of the principal amount, together with accrued and unpaid interest to, but excluding, the redemption date, plus a customary make-whole premium. In addition, on or prior to March 15, 2019, we may redeem up to 35% of the aggregate principal amount of the 2022 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 108.75% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2022 Notes originally issued remain outstanding immediately after such redemption. For additional redemption features of the 2022 Notes after March 15, 2019, refer to the table below that summarizes the redemption terms for our Senior Notes.

The 2022 Notes are unsecured senior obligations that rank equally with all of our other unsecured senior indebtedness. The 2022 Notes are fully and unconditionally guaranteed jointly and severally on an unsecured senior basis by substantially all of our subsidiaries. The 2022 Notes and related guarantees are effectively junior to our secured obligations (such as the Facility and our term loan discussed below) to the extent of the value of the collateral securing those obligations. Upon the occurrence of certain specified changes of control, the holders of the 2022 Notes will have the right to require us to purchase all or a part of the notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

The proceeds from the 2022 Notes were principally used to redeem all of our remaining outstanding 6.625% Senior Secured Notes due April 2018 (the 2018 Notes) and our 9.125% Senior Notes due May 2019 (the May 2019 Notes).

The table below summarizes the redemption terms for our Senior Notes:



Senior Note Description	Issuance Date	Maturity Date	Redemption Terms
5 3/4% Senior Notes	April 2014	June 2019	Callable at any time before March 15, 2019, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a customary make-whole premium
7 1/2% Senior Notes	September 2013	September 2021	Callable at a redemption price equal to 105.625% of the principal amount; after September 15, 2017, callable at a redemption price equal to 103.75% of the principal amount; after September 15, 2018, callable at a redemption price equal to 101.875% of the principal amount; after September 15, 2019, callable at 100% of the principal amount plus accrued and unpaid interest
8 3/4% Senior Notes	September 2016	March 2022	Callable at any time prior to March 15, 2019, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a customary make-whole premium; after March 15, 2019, callable at a redemption price equal to 104.375% of the principal amount; after March 15, 2020, callable at a redemption price equal to 102.188% of the principal amount; after September 15, 2021, callable at a redemption price equal to 100% of the principal amount
7 1/4% Senior Notes	February 2013	February 2023	Callable at any time prior to February 1, 2018, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a customary make-whole premium; after February 1, 2018, callable at a redemption price equal to 103.625% of the principal amount; after February 1, 2019, callable at a redemption price equal to 102.41% of the principal amount; after February 1, 2020, callable at a redemption price equal to 101.208% of the principal amount; after February 1, 2021, callable at 100% of the principal amount plus accrued and unpaid interest

During the current fiscal year, we redeemed the 2018 Notes and the May 2019 Notes principally by utilizing the proceeds received from the issuance of the 2022 Notes, as well as cash on hand. We also redeemed the remaining Senior Notes due 2016 (the 2016 Notes) outstanding, mainly by utilizing the proceeds received from the term loan issued in March 2016, which is discussed below. Additionally, we redeemed $3.6 million of our Senior Notes due June 2019 and $2.0 million of our Senior Notes due September 2021 during the current fiscal year, as well as a de minimus amount of our Senior Notes due February 2023. These debt repurchase activities resulted in a total net loss on extinguishment of debt of $13.4 million for the year ended September 30, 2016.

Term Loan. In March 2016, we entered into a credit agreement (the Credit Agreement) that provided us with a $140 million, two-year secured term loan (the Term Loan). The Term Loan requires quarterly principal payments of $17.5 million starting on June 30, 2016, and bears interest at the London Interbank Offered Rate (LIBOR) plus 550 basis points (6.750% as of September 30, 2016). The proceeds from the Term Loan were used to fund the redemption of the 2016 Notes. The Term Loan will mature and all remaining amounts outstanding thereunder will be due and payable on March 11, 2018, but can be pre-paid at any time without penalty. During our fiscal 2016, we redeemed $85.0 million of the Term Loan through our two scheduled payments of $17.5 million due June 30, 2016 and September 30, 2016, as well as a $50.0 million prepayment made during the fourth quarter.

Substantially all of our subsidiaries are guarantors of the obligations under the Credit Agreement. Collectively, we granted security interests and mortgage liens on substantially all of our tangible and intangible assets on a second lien basis, since they are subordinate to those that exist on the Facility.

The Credit Agreement contains covenants which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the Credit Agreement) to, among other things, incur additional indebtedness, engage in certain asset sales, make certain types of restricted payments and create liens on assets of the Company or its restricted subsidiaries; these covenants are similar to existing covenants under our Senior Notes. In addition, the Credit Agreement requires the Company’s inventory (as defined in the Credit Agreement) to be no less than $1.25 billion as of the last day of any fiscal quarter. The Credit Agreement also includes customary events of default, including, but not limited to, the failure to pay any interest, principal or fees when due; the failure to perform or the violation of any covenant or agreement; inaccurate or false representations or warranties; a default on other material indebtedness, insolvency or bankruptcy; a change of control; and the occurrence of certain material judgments against the Company. As of September 30, 2016, we were in compliance with all such covenants.

Junior Subordinated Notes. Our unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036. The Junior Subordinated Notes are redeemable at par and paid interest at a fixed rate of 7.987% for the first ten years ending July 30, 2016. The securities now have a floating interest rate as defined in the Junior Subordinated Notes Indenture, which was a weighted-average of 3.98% as of September 30, 2016 (because the rate on the portion of the Junior Subordinated Notes that were modified, as discussed below, is subject to a floor). The obligations relating to these notes are subordinated to the Facility, the Senior Notes and the Term Loan. In January 2010, we modified the terms of $75.0 million of these notes and recorded them at their then estimated fair value. Over the remaining life of the Junior Subordinated Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of September 30, 2016, the unamortized accretion was $40.9 million and will be amortized over the remaining life of the notes. As of September 30, 2016, we were in compliance with all covenants under our Junior Subordinated Notes.

Cash Secured Loans. In March 2016, we redeemed the entire balance of our cash secured loan facilities using the cash that fully secured the borrowings under these facilities. This secured cash was reflected as restricted cash on our consolidated balance sheets.

Other Secured Notes Payable. We periodically acquire land through the issuance of notes payable. As of September 30, 2016 and September 30, 2015, we had outstanding notes payable of $11.8 million and $20.9 million, respectively, primarily related to land acquisitions. These secured notes payable related to land acquisitions have varying expiration dates between 2017 and 2019, and have a weighted average fixed interest rate of 4.48% as of September 30, 2016. These notes are secured by the real estate to which they relate.

The agreements governing these other secured notes payable contain various affirmative and negative covenants. There can be no assurance that we will be able to obtain any future waivers or amendments that may become necessary without significant additional cost or at all. In each instance, however, a covenant default can be cured by repayment of the indebtedness.