Meritage Homes Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LOANS PAYABLE AND OTHER BORROWINGS

LOANS PAYABLE AND OTHER BORROWINGS

9 Months Ended

Sep. 30, 2017

Loans payable and other borrowings consist of the following (in thousands):



	As of
	September 30, 2017		December 31, 2016
Other borrowings, real estate notes payable ⁽¹⁾	$	13,082	$	17,195
$625 million unsecured revolving credit facility with interest approximating LIBOR (approximately 1.23% at September 30, 2017) plus 1.75% or Prime (4.25% at September 30, 2017) plus 0.75%	25,000		15,000
Total	$	38,082	$	32,195


(1)	Reflects balance of non-recourse notes payable in connection with land purchases, with interest rates ranging from 0% to 8%.

The Company has a $625.0 million unsecured revolving credit facility ("Credit Facility"), with an accordion feature that permits the size of the facility to increase to a maximum of $725.0 million. In May 2017, the maturity date of the credit facility was extended whereby $60.0 million matures in July 2019 with the remainder maturing in July 2021. Borrowings under the Credit Facility are unsecured but availability is subject to, among other things, a borrowing base. The Credit Facility also contains certain financial covenants, including (a) a minimum tangible net worth requirement of $987.4 million (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), and (b) a maximum leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 60%. In addition, we are required to maintain either (i) an interest coverage ratio (EBITDA to interest expense, as defined therein) of at least 1.50 to 1.00 or (ii) liquidity (as defined therein) of an amount not less than our consolidated interest incurred during the trailing 12 months.

We had $25.0 million of outstanding borrowings under the Credit Facility as of September 30, 2017 and $15.0 million in borrowings at December 31, 2016. During the nine months ended September 30, 2017 we had $320.0 million of gross borrowings and $310.0 million of repayments. During the nine months ended September 30, 2016 we had $106.0 million of gross borrowings and $81.0 million of repayments. As of September 30, 2017 we had outstanding letters of credit issued under the Credit Facility totaling $66.5 million, leaving $533.5 million available under the Credit Facility to be drawn.