Meritage Homes ups credit agreement to $780 million, extends to 2022

By Sarah Lizee

Olympia, Wash., June 29 – Meritage Homes Corp. entered into a fourth amendment to its amended and restated credit agreement on Thursday with JPMorgan Chase Bank, NA as administrative agent to increase the total commitments available under the credit agreement to $780 million from $625 million, according to an 8-K filing with the Securities and Exchange Commission.

Additionally, the maturity date was extended to July 9, 2022 from July 9, 2021.

The amendment also refreshes the accordion feature to allow the company to increase the total commitments by up to $100 million.

Pricing was slightly revised to Libor plus a margin that ranges from 150 basis points to 200 bps, based on the leverage ratio. The commitment fee ranges from 25 bps to 35 bps and is also based on the leverage ratio.

The amendment also resets the minimum consolidated tangible net worth floor to 70% of consolidated tangible net worth as of March 31.

Other financial covenants were not modified, the filing noted.

As of Thursday, there were no borrowings outstanding under the credit agreement and the company had outstanding letters of credit totaling about $78 million, leaving roughly $702 million available under the credit agreement to be drawn.

Meritage is a homebuilder based in Scottsdale, Ariz.

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