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, 2018

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



	As of
	September 30, 2018		December 31, 2017
Other borrowings, real estate notes payable ⁽¹⁾	$	16,669	$	17,354
$780 million unsecured revolving credit facility with interest approximating LIBOR (approximately 2.26% at September 30, 2018) plus 1.75% or Prime (5.25% at September 30, 2018) plus 0.75%	—		—
Total	$	16,669	$	17,354


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

The Company entered into an amended and restated unsecured revolving credit facility ("Credit Facility") in 2014 that has been amended from time to time. In June 2018 the aggregate commitment was increased to $780.0 million, and the maturity date extended to July 2022. The accordion feature was also refreshed permitting the size of the facility to increase to a maximum of $880.0 million. 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 $1.1 billion (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 no outstanding borrowings under the Credit Facility as of September 30, 2018 or December 31, 2017. During the nine months ended September 30, 2018, we had $285.0 million in gross borrowings and repayments. During the nine months ended September 30, 2017, we had $320.0 million of gross borrowings and $310.0 million of repayments. As of September 30, 2018, we had outstanding letters of credit issued under the Credit Facility totaling $76.2 million, leaving $703.8 million available under the Credit Facility to be drawn.