Mortgages and Notes Payable

Mortgages and notes payable consisted of the following (in thousands):



	August 31, 2012		November 30, 2011
Mortgages and land contracts due to land sellers and other loans	$	57,510	$	24,984
Senior notes due 2014 at 5 3/4%	75,898		249,647
Senior notes due 2015 at 5 7/8%	101,980		299,273
Senior notes due 2015 at 6 1/4%	236,819		449,795
Senior notes due 2017 at 9.10%	261,284		260,865
Senior notes due 2018 at 7 1/4%	299,098		299,007
Senior notes due 2020 at 8.00%	345,090		—
Senior notes due 2022 at 7.50%	350,000		—
Total	$	1,727,679	$	1,583,571

The Company maintains the LOC Facilities to provide letters of credit in the ordinary course of operating its business. As of August 31, 2012 and November 30, 2011, $45.2 million and $63.8 million, respectively, of letters of credit were outstanding under the LOC Facilities. The LOC Facilities require the Company to deposit and maintain cash with the issuing financial institutions as collateral for its letters of credit outstanding. The Company may maintain, revise or, if necessary or desirable, enter into additional or expanded letter of credit facilities, or other similar facility arrangements, with the same or other financial institutions.

On February 7, 2012, pursuant to its universal shelf registration statement filed with the SEC on September 20, 2011 (the “2011 Shelf Registration”), the Company issued the $350 Million 8.00% Senior Notes. The $350 Million 8.00% Senior Notes, which are due on March 15, 2020, with interest payable semi-annually, represent senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness. The $350 Million 8.00% Senior Notes may be redeemed, in whole at any time or from time to time in part, at a price equal to the greater of (a) 100% of their principal amount and (b) the sum of the present values of the remaining scheduled payments of principal and interest discounted to the date of redemption at a defined rate, plus, in each case, accrued and unpaid interest to the applicable redemption date. If a change in control occurs as defined in the instruments governing the $350 Million 8.00% Senior Notes, the Company would be required to offer to purchase the $350 Million 8.00% Senior Notes at 101% of their principal amount, together with all accrued and unpaid interest, if any. The $350 Million 8.00% Senior Notes are unconditionally guaranteed jointly and severally by certain of the Company’s subsidiaries (the “Guarantor Subsidiaries”) on a senior unsecured basis. The Company used substantially all of the net proceeds from the issuance of the $350 Million 8.00% Senior Notes to purchase, pursuant to the terms of tender offers that were initially made on January 19, 2012 (the “January 2012 Tender Offers”), $56.3 million in aggregate principal amount of its 5 3/4% senior notes due 2014, $130.0 million in aggregate principal amount of its 5 7/8% senior notes due 2015, and $153.7 million in aggregate principal amount of its 6 1/4% senior notes due 2015. The applicable January 2012 Tender Offers expired on February 15, 2012. The total amount paid to purchase these senior notes was $340.5 million. The Company incurred a loss of $2.0 million in the first quarter of 2012 related to the early redemption of debt due to a premium paid under the January 2012 Tender Offers and the unamortized original issue discount.

On July 31, 2012, pursuant to the 2011 Shelf Registration, the Company issued the $350 Million 7.50% Senior Notes. The $350 Million 7.50% Senior Notes, which are due on September 15, 2022, with interest payable semi-annually, represent senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness. The $350 Million 7.50% Senior Notes may be redeemed, in whole at any time or from time to time in part, at a price equal to the greater of (a) 100% of their principal amount and (b) the sum of the present values of the remaining scheduled payments of principal and interest discounted to the date of redemption at a defined rate, plus, in each case, accrued and unpaid interest to the applicable redemption date. If a change in control occurs as defined in the instruments governing the $350 Million 7.50% Senior Notes, the Company would be required to offer to purchase the $350 Million 7.50% Senior Notes at 101% of their principal amount, together with all accrued and unpaid interest, if any. The $350 Million 7.50% Senior Notes are unconditionally guaranteed jointly and severally by the Guarantor Subsidiaries on a senior unsecured basis. The Company used $252.2 million of the net proceeds from the issuance of the $350 Million 7.50% Senior Notes to purchase, pursuant to the terms of tender offers that were initially made on July 11, 2012 (the “July 2012 Tender Offers”), $117.7 million in aggregate principal amount of its 5 3/4% senior notes due 2014, $67.8 million in aggregate principal amount of its 5 7/8% senior notes due 2015, and $59.4 million in aggregate principal amount of its 6 1/4% senior notes due 2015. The applicable July 2012 Tender Offers expired on August 7, 2012. The Company plans to use the remaining net proceeds from the issuance of the $350 Million 7.50% Senior Notes for general corporate purposes. The Company incurred a loss of $8.3 million in the third quarter of 2012 related to the early redemption of debt due to a premium paid under the July 2012 Tender Offers and the unamortized original issue discount.

The indenture governing the Company’s senior notes does not contain any financial maintenance covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit the Company’s ability to incur secured indebtedness, or engage in sale-leaseback transactions involving property or assets above a certain specified value. Unlike the Company’s other senior notes, the terms governing the Company’s $265.0 million in aggregate principal amount of 9.10% senior notes due 2017 (the “$265 Million Senior Notes”), the $350 Million 8.00% Senior Notes, and the $350 Million 7.50% Senior Notes contain certain limitations related to mergers, consolidations, and sales of assets.

As of August 31, 2012, the Company was in compliance with the applicable terms of all of its covenants under the Company’s senior notes, the indenture, and mortgages and land contracts due to land sellers and other loans. The Company’s ability to secure future debt financing may depend in part on its ability to remain in such compliance.

Principal payments on senior notes, mortgages and land contracts due to land sellers and other loans are due as follows: 2012 –$1.7 million; 2013 – $10.1 million; 2014 – $75.9 million; 2015 – $384.6 million; 2016 – $0; and thereafter – $1.26 billion.