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Senior Notes, Loans Payable and Mortgage Repurchase Facilities | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Senior Notes, Loans Payable and Mortgage Repurchase Facilities | Senior Notes, Loans Payable and Mortgage Repurchase Facilities Senior Notes The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):
| June 30, 2024 |  | December 31, 2023 |
5.875% Senior Notes due June 15, 2024 | $ | — |  |  | $ | 450,000 |  |
5.250% Senior Notes due June 1, 2027 | 300,000 |  |  | 300,000 |  |
5.700% Senior Notes due June 15, 2028 | 350,000 |  |  | 350,000 |  |
Discount and deferred loan costs | (3,970) |  |  | (5,751) |  |
Total | $ | 646,030 |  |  | $ | 1,094,249 |  |
In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) a t 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity. In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs a nd discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity. Tri Pointe and its wholly owned subsidiary, Tri Pointe Homes Holdings, Inc., were co-issuers of the $450 million aggregate principal amount 5.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were issued at 98.15% of their aggregate principal amount in June of 2014. The net proceeds from the offering of the 2024 Notes was $429.0 million, after debt issuance costs and discounts. The 2024 Notes were scheduled to mature on June 15, 2024; however, on May 15, 2024, we redeemed the entire outstanding principal amount of the 2024 Notes at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon to the redemption date. As of June 30, 2024 and December 31, 2023, there were $4.0 million and $5.2 million of capitalized debt financing costs, included in senior notes, net on our consolidated balance sheet, related to the Senior Notes that will amortize over the lives of the Senior Notes. Accrued interest related to the Senior Notes was $2.1 million and $3.2 million as of June 30, 2024 and December 31, 2023, respectively. Loans Payable The Company’s outstanding loans payable consisted of the following (in thousands):
| June 30, 2024 |  | December 31, 2023
Term loan facility | $ | 250,000 |  |  | $ | 250,000 |
Seller financed loans | 33,929 |  |  | 38,337 |
Total | $ | 283,929 |  |  | $ | 288,337 |
On December 15, 2023, we entered into a Fourth Modification Agreement (the “Fourth Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019 (the “Credit Agreement”). The Fourth Modification, among other things, amends the Credit Agreement to exclude (i) certain indebtedness of the Company’s financial services subsidiaries for purposes of calculating the Company’s “Leverage Ratio” (as defined in the Credit Agreement), and (ii) the Company’s financial services subsidiaries from the determination of “Consolidated EBITDA” (as defined in the Credit Agreement), as well as any interest obligations of the Company’s financial services subsidiaries, for purposes of calculating the Company’s “Interest Coverage Ratio” (as defined in the Credit Agreement). The Credit Facility (as defined below), consists of a $750 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”). Both the Revolving Facility and the Term Facility mature on June 29, 2027. We may increase the Credit Facility to not more than $1.2 billion in the aggregate, at our request, upon satisfaction of specified conditions. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio. As of June 30, 2024, we had no outstanding debt under the Revolving Facility and there was $707.3 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of June 30, 2024, we had $250 million of outstanding debt under the Term Facility with an interest rate of 6.51%. As of June 30, 2024, there were $4.4 million of capitalized debt financing costs, included in other assets on our consolidated balance sheet, related to the Credit Facility that will amortize over the remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Credit Facility was $1.6 million as of both June 30, 2024 and December 31, 2023, respectively. At June 30, 2024 and December 31, 2023, we had outstanding letters of credit of $42.7 million and $52.3 million, respectively. These letters of credit were issued to secure various financial obligations. We believe it is not probable that any outstanding letters of credit will be drawn upon. As of June 30, 2024 and December 31, 2023, we had $33.9 million and $38.3 million, respectively, outstanding related to two seller-financed loans. All seller-financed loans are to acquire lots for the construction of homes. Principal on these loans are expected to be fully paid by the end of fiscal year 2025, provided certain achievements are met. One of the seller-financed loans, representing $32.6 million of the total balance as of June 30, 2024 and $37.4 million of the balance as of December 31, 2023, accrues interest at an imputed interest rate of 4.50% per annum. The second seller-financed loan represented $1.3 million of the total balance as of June 30, 2024 and $910,000 as of December 31, 2023, respectively. Mortgage Repurchase Facilities Between March 2024 and May 2024, Tri Pointe Connect entered into three Master Repurchase Agreements totaling $280 million (“Repurchase Agreements”). The Repurchase Agreements contain various affirmative and negative covenants applicable to Tri Pointe Connect, including thresholds related to net worth, net income, liquidity, and profitability. As of June 30, 2024, Tri Pointe Connect had $32.1 million of outstanding debt related to the Repurchase Agreements at a weighted-average interest rate of 6.6%, and $247.9 million of remaining capacity under the Repurchase Agreements. Tri Pointe Connect was in compliance with all covenants and requirements as of June 30, 2024. The following table provides a summary of our Repurchase Agreements as of June 30, 2024 ($ in thousands):
Facility | Outstanding Balance |  | Facility Amount |  | Interest Rate |  | Expiration Date |  | Collateral (1)
Warehouse A | $ | 29,476 |  |  | $ | 80,000 |  |  | Term SOFR + 1.75% |  | 3/11/2025 |  | Mortgage Loans
Warehouse B | 2,186 |  |  | 100,000 |  |  | Term SOFR + 1.75% |  | 5/28/2025 |  | Mortgage Loans
Warehouse C (2) | 435 |  |  | 50,000 |  |  | Term SOFR + 1.75% |  | 5/30/2025 |  | Mortgage Loans
Warehouse C (2) | — |  |  | 50,000 |  |  | Term SOFR + 1.75% |  | On Demand |  | Mortgage Loans
Total | $ | 32,097 |  |  | $ | 280,000 |  |  |  |  |  |  |
__________ (1) Mortgage loans held for sale consist of single-family residential loans collateralized by the underlying property. Generally, all of the loans originated by us are sold in the secondary mortgage market within 30 days after origination. As of June 30, 2024, residential mortgage loans available-for-sale had an aggregate fair value of $32.9 million. (2) Warehouse C is a $100 million facility, of which $50 million is committed and $50 million is uncommitted. Interest Incurred During the three months ended June 30, 2024 and 2023, the Company incurred interest of $30.4 million and $37.4 million, respectively, related to all debt and land banking arrangements. Included in interest incurred are amortization of deferred financing and Senior Note discount costs of $1.3 million and $1.3 million for the three months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024 and 2023, the Company incurred interest of $66.5 million and $74.9 million, respectively, related to all debt and land banking arrangements and amortization of deferred financing and Senior Note discount costs of $2.5 million for both the six months ended June 30, 2024 and 2023, respectively. Accrued interest related to all outstanding debt at June 30, 2024 and December 31, 2023 was $5.9 million and $8.5 million, respectively. Covenant Requirements The Senior Notes contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions. Under the Credit Facility, the Company is required to comply with certain financial covenants, including those relating to consolidated tangible net worth, leverage, liquidity or interest coverage, and a spec unit inventory test. The Credit Facility also requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods. The Company was in compliance with all applicable financial covenants as of June 30, 2024 and December 31, 2023.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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