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Debt | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Debt | Debt The following table presents the carrying values of Zillow Group’s debt as of the dates presented (in millions):
| September 30, 2023 |  | December 31, 2022
Credit facilities |  |  |
Master repurchase agreements: |  |  |
JPMorgan Chase Bank, N.A.(1) | $ | 68 |  |  | $ | — |
Atlas Securitized Products, L.P.(2) | 22 |  |  | 23 |
Citibank, N.A.(3) | — |  |  | 3 |
Warehouse line of credit: |  |  |
Comerica Bank | 1 |  |  | 11 |
Total credit facilities | 91 |  |  | 37 |
Convertible senior notes |  |  |
1.375% convertible senior notes due 2026 | 496 |  |  | 495 |
2.75% convertible senior notes due 2025 | 561 |  |  | 560 |
0.75% convertible senior notes due 2024 | 607 |  |  | 605 |
Total convertible senior notes | 1,664 |  |  | 1,660 |
Total debt | $ | 1,755 |  |  | $ | 1,697 |
(1)Agreement commenced on June 1, 2023 and provides for a total maximum borrowing capacity of $100 million, $25 million of which is committed, until May 30, 2024.
(2)Agreement was reassigned from Credit Suisse AG, Cayman Islands (“Credit Suisse”) on May 25, 2023.
(3)Agreement expired on June 9, 2023 and was not renewed.
Credit Facilities To provide capital for Zillow Home Loans, we utilize master repurchase agreements and a warehouse line of credit. The following table summarizes certain details related to our outstanding master repurchase agreements and warehouse line of credit as of September 30, 2023 (in millions, except interest rates):
Lender |  | Maturity Date |  | Maximum Borrowing Capacity |  | Weighted-Average Interest Rate
JPMorgan Chase Bank, N.A. |  | May 30, 2024 |  | $ | 100 |  |  | 7.03 | %
Atlas Securitized Products, L.P. |  | March 11, 2024 |  | 50 |  |  | 7.32 | %
Comerica Bank |  | December 29, 2023 |  | 50 |  |  | 7.45 | %
|  | Total |  | $ | 200 |  |  |
On August 17, 2023, Zillow Home Loans amended its warehouse line of credit with Comerica Bank to extend the date after which Zillow Home Loans is no longer permitted to draw additional amounts on the warehouse line of credit from September 30, 2023 to November 1, 2023. In accordance with the master repurchase agreements, Atlas Securitized Products, L.P., JPMorgan Chase Bank, N.A and prior to its expiration in June 2023, Citibank, N.A., (together, the “Lenders”) agreed to pay Zillow Home Loans a negotiated purchase price for eligible loans, and Zillow Home Loans simultaneously agreed to repurchase such loans from the Lenders under a specified timeframe at an agreed upon price that includes interest. The master repurchase agreements contain margin call provisions that provide the Lenders with certain rights in the event of a decline in the market value of the assets purchased under the master repurchase agreements. As of September 30, 2023 and December 31, 2022, $93 million and $28 million, respectively, in mortgage loans held for sale were pledged as collateral under the master repurchase agreements. Borrowings on the repurchase agreements and warehouse line of credit bear interest either at a floating rate based on Secured Overnight Financing Rate plus an applicable margin, as defined by the governing agreements, or Bloomberg Short-Term Bank Yield Index Rate plus an applicable margin, as defined by the governing agreements. The repurchase agreements and warehouse line of credit include customary representations and warranties, covenants and provisions regarding events of default. As of September 30, 2023, Zillow Home Loans was in compliance with all financial covenants and no event of default had occurred. The repurchase agreements and warehouse line of credit are recourse to Zillow Home Loans, and have no recourse to Zillow Group or any of its other subsidiaries. For additional details related to our repurchase agreements and warehouse line of credit, see Note 13 in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Convertible Senior Notes Effective January 1, 2022, we adopted guidance which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Refer to Note 2 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for additional information regarding the adoption of this guidance. The following tables summarize certain details related to our outstanding convertible senior notes as of the dates presented or for the periods ended (in millions, except interest rates):
|  |  |  |  |  |  |  |  |  | September 30, 2023 |  | December 31, 2022
Maturity Date |  | Aggregate Principal Amount |  | Stated Interest Rate |  | Effective Interest Rate |  | Semi-Annual Interest Payment Dates |  | Unamortized Debt Issuance Costs |  | Fair Value |  | Unamortized Debt Issuance Costs |  | Fair Value
September 1, 2026 |  | $ | 499 |  |  | 1.375 | % |  | 1.57 | % |  | March 1; September 1 |  | $ | 3 |  |  | $ | 598 |  |  | $ | 4 |  |  | $ | 504 |
May 15, 2025 |  | 565 |  |  | 2.75 | % |  | 3.20 | % |  | May 15; November 15 |  | 4 |  |  | 571 |  |  | 5 |  |  | 531 |
September 1, 2024 |  | 608 |  |  | 0.75 | % |  | 1.02 | % |  | March 1; September 1 |  | 1 |  |  | 706 |  |  | 3 |  |  | 629 |
Total |  | $ | 1,672 |  |  |  |  |  |  |  |  | $ | 8 |  |  | $ | 1,875 |  |  | $ | 12 |  |  | $ | 1,664 |
|  | Three Months Ended September 30, 2023 |  | Three Months Ended September 30, 2022
Maturity Date |  | Contractual Coupon Interest |  | Amortization of Debt Issuance Costs |  | Interest Expense |  | Contractual Coupon Interest |  |  |  | Amortization of Debt Issuance Costs |  | Interest Expense
September 1, 2026 |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 2 |  |  |  |  | $ | — |  |  | $ | 2 |
May 15, 2025 |  | 4 |  |  | — |  |  | 4 |  |  | 4 |  |  |  |  | 1 |  |  | 5 |
September 1, 2024 |  | 1 |  |  | 1 |  |  | 2 |  |  | 1 |  |  |  |  | 1 |  |  | 2 |
Total |  | $ | 7 |  |  | $ | 1 |  |  | $ | 8 |  |  | $ | 7 |  |  |  |  | $ | 2 |  |  | $ | 9 |
|  | Nine Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2022
Maturity Date |  | Contractual Coupon Interest |  | Amortization of Debt Issuance Costs |  | Interest Expense |  | Contractual Coupon Interest |  | Amortization of Debt Issuance Costs |  | Interest Expense
September 1, 2026 |  | $ | 6 |  |  | $ | 1 |  |  | $ | 7 |  |  | $ | 5 |  |  | $ | — |  |  | $ | 5 |
May 15, 2025 |  | 12 |  |  | 1 |  |  | 13 |  |  | 12 |  |  | 2 |  |  | 14 |
September 1, 2024 |  | 3 |  |  | 2 |  |  | 5 |  |  | 4 |  |  | 1 |  |  | 5 |
Total |  | $ | 21 |  |  | $ | 4 |  |  | $ | 25 |  |  | $ | 21 |  |  | $ | 3 |  |  | $ | 24 |
The convertible notes maturing in 2026 (“2026 Notes”), 2025 (“2025 Notes”) and 2024 (“2024 Notes”) (together, the “Notes”) are senior unsecured obligations. The 2026 Notes and 2025 Notes are classified as long-term debt and the 2024 Notes are classified as current liabilities in our condensed consolidated balance sheets based on their contractual maturity dates. Interest on the convertible notes is paid semi-annually in arrears. The estimated fair value of the convertible senior notes is classified as Level 2 and was determined through consideration of quoted market prices in markets that are not active. The Notes are convertible into cash, shares of Class C capital stock or a combination thereof, at our election, and may be settled as described below. They will mature on their respective maturity dates, unless earlier repurchased, redeemed or converted in accordance with their terms. The following table summarizes the conversion and redemption options with respect to the Notes:
Maturity Date |  | Early Conversion Date |  | Conversion Rate |  | Conversion Price |  | Optional Redemption Date
September 1, 2026 |  | March 1, 2026 |  | 22.9830 |  | $ | 43.51 |  |  | September 5, 2023
May 15, 2025 |  | November 15, 2024 |  | 14.8810 |  | 67.20 |  |  | May 22, 2023
September 1, 2024 |  | March 1, 2024 |  | 22.9830 |  | 43.51 |  |  | September 5, 2022
The following table summarizes certain details related to the capped call confirmations with respect to the convertible senior notes:
Maturity Date |  | Initial Cap Price |  | Cap Price Premium
September 1, 2026 |  | $ | 80.5750 |  |  | 150 | %
September 1, 2024 |  | 72.5175 |  |  | 125 | %
There were no conversions of the Notes during the three and nine months ended September 30, 2023 or 2022. The last reported sale price of our Class C capital stock did not exceed 130% of the conversion price of each series of the Notes for more than 20 trading days during the 30 consecutive trading days ended September 30, 2023. Accordingly, each series of the Notes is not redeemable or convertible at the option of the holders during the three months ending December 31, 2023. For additional details related to our convertible senior notes, see Note 13 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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