Lennar Homebuilding Senior Notes And Other Debts Payable

12 Months Ended

Nov. 30, 2021

Lennar Homebuilding Senior Notes And Other Debts Payable

Homebuilding Senior Notes and Other Debts Payable


	November 30,
(Dollars in thousands)	2021		2020

4.750% senior notes due 2022	$	573,840	572,724
4.875% senior notes due December 2023	398,345		397,347
4.500% senior notes due 2024	648,253		647,528
5.875% senior notes due 2024	438,810		443,484
4.750% senior notes due 2025	498,446		498,002
5.25% senior notes due 2026	405,497		406,709
5.00% senior notes due 2027	352,124		352,508
4.75% senior notes due 2027	895,510		894,760
6.25% senior notes due December 2021	—		305,221
4.125% senior notes due 2022	—		598,876
5.375% senior notes due 2022	—		255,342
Mortgage notes on land and other debt	441,513		583,257
	$	4,652,338	5,955,758

The carrying amounts of the senior notes listed above are net of debt issuance costs of $11.0 million and $15.9 million, as of November 30, 2021 and 2020, respectively.

In June 2021, the Company retired $300 million aggregate principal amount of its 6.25% senior notes due December 2021 at par. In October 2021, the Company retired $600 million aggregate principal amount of its 4.125% senior notes due January 2022 at par. In November 2021, the Company retired early, at a premium, $250 million aggregate principal amount of its 5.375% senior notes due October 2022. The loss on early retirement of the $250 million senior notes was $7.4 million.

At November 30, 2021, the Company had an unsecured revolving credit facility (the "Credit Facility") with maximum borrowings of $2.5 billion maturing in 2024, that included a $300 million accordion feature, subject to additional commitments, thus the maximum borrowings could be $2.8 billion. The credit agreement also provides that up to $500 million in commitments may be used for letters of credit. As of both November 30, 2021 and 2020, the Company had no outstanding borrowings under the Credit Facility. Under the Credit Facility agreement, the Company is required to maintain a minimum consolidated tangible net worth, a maximum leverage ratio and either a liquidity or an interest coverage ratio. These ratios are calculated per the Credit Facility agreement, which involves adjustments to GAAP financial measures. The Company believes it was in compliance with its debt covenants at November 30, 2021. In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.

Performance letters of credit are generally posted with regulatory bodies to guarantee the Company’s performance of certain development and construction activities. Financial letters of credit are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. Additionally, at November 30, 2021, the Company had outstanding surety bonds including performance surety bonds related to site improvements at various projects (including certain projects of the Company’s joint ventures) and financial surety bonds. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities are completed. The Company does not presently anticipate any draws upon these bonds or letters of credit, but if any such draws occur, the Company does not believe they would have a material effect on its financial position, results of operations or cash flows.

The Company's outstanding letters of credit and surety bonds are described below:


	November 30,
(In thousands)	2021		2020
Performance letters of credit	$	924,584	752,096
Financial letters of credit	425,843		283,193
Surety bonds	3,553,047		3,087,711
Anticipated future costs primarily for site improvements related to performance surety bonds	1,690,861		1,584,642

The terms of each of the Company's senior notes outstanding at November 30, 2021 were as follows:


Senior Notes Outstanding (1)	Principal Amount		Net Proceeds (2)		Price		Dates Issued
(Dollars in thousands)
4.750% senior notes due 2022	$	575,000	$	567,585	(4)		October 2012, February 2013, April 2013
4.875% senior notes due December 2023	400,000		393,622		99.169	%	November 2015
4.500% senior notes due 2024	650,000		644,838		100	%	April 2017
5.875% senior notes due 2024	425,000		(3)		(3)		(3)
4.750% senior notes due 2025	500,000		495,528		100	%	April 2015
5.25% senior notes due 2026	400,000		(3)		(3)		(3)
5.00% senior notes due 2027	350,000		(3)		(3)		(3)
4.75% senior notes due 2027	900,000		894,650		100	%	November 2017

(1)Interest is payable semi-annually for each of the series of senior notes. The senior notes are unsecured and unsubordinated, but are guaranteed by substantially all of the Company's 100% owned homebuilding subsidiaries.

(2)The Company generally has historically used the net proceeds for working capital and general corporate purposes, which can include the repayment or repurchase of other outstanding senior notes.

(3)These notes were obligations of CalAtlantic when it was acquired, and were subsequently exchanged in part for notes of the Company. As part of purchase accounting, the senior notes have been recorded at their fair value as of the date of acquisition (February 12, 2018).

(4)The Company issued $350 million aggregate principal amount at a price of 100%, $175 million aggregate principal amount at a price of 98.073% and $50 million aggregate principal amount at a price of 98.250%.

The Company's senior notes are guaranteed by substantially all of the Company's 100% owned homebuilding subsidiaries and some of the Company's other subsidiaries. Although the guarantees are full, unconditional and joint and several while they are in effect, (i) a subsidiary will have its guarantee suspended at any time when it is not directly or indirectly guaranteeing at least $75 million of debt of Lennar Corporation (the parent company) other than senior notes, and (ii) a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed of.

At November 30, 2021, the Company had mortgage notes on land and other debt due at various dates through 2036 bearing interest at rates up to 8.0% with an average interest rate of 4.0%. At November 30, 2021 and 2020, the carrying amount of the mortgage notes on land and other debt was $441.5 million and $583.3 million, respectively. During the years ended November 30, 2021 and 2020, the Company retired $195.2 million and $555.6 million, respectively, of mortgage notes on land and other debt.

The minimum aggregate principal maturities of Homebuilding senior notes and other debts payable during the five years subsequent to November 30, 2021 and thereafter are as follows:


(In thousands)	Debt Maturities
2022	$	718,279
2023	104,387
2024	1,529,977
2025	591,432
2026	402,794
Thereafter	1,294,642

The Company expects to pay its near-term maturities as they come due through cash generated from operations, the issuance of additional debt or equity offerings as well as borrowings under the Company's Credit Facility.