DEBT

Term Loan Facility

Term loan facility outstanding consists of the following (in thousands):



	September 30, 2015		December 31, 2014
Term Loan Facility	$	—	$	150,000

On October 27, 2014, in connection with the Transaction, the Company entered into the Loan Agreement, a guaranty and a pledge and security agreement with certain funds and accounts managed by Greenlight, our largest shareholder. Greenlight beneficially owns approximately 49.9% of the voting power of the Company. The Loan Agreement provided for a five year term loan facility in an aggregate principal amount of $150.0 million which funded part of the Transaction (the “Term Loan Facility”). Certain subsidiaries of the Company guaranteed obligations under the Term Loan Facility pursuant to the guaranty.

The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. The Company had a one-time right to elect to pay up to four consecutive quarters’ interest in kind. The Term Loan Facility was subject to mandatory prepayment with 100% of the net cash proceeds received from the incurrence of certain debt by the Company or the issuance of certain equity securities. Voluntary prepayments of the Term Loan Facility were permitted at any time. All prepayments made prior to October 27, 2016 were subject to a 1.0% prepayment premium.

The Term Loan Facility was secured by a first priority lien on substantially all of our assets and substantially all of the assets, subject to certain exceptions, of each of the Company’s subsidiaries.

The costs associated with the issuance of the Term Loan Facility of $0.4 million were deferred and are included in other assets in our consolidated balance sheet at December 31, 2014. We amortized these debt issuance costs to interest expense over the term of the Term Loan Facility using the effective interest method.

On July 1, 2015 we used approximately $154.9 million of the net proceeds from the Equity Offering, as defined in Note 6, to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated. In connection with the termination of the Term Loan Facility, we wrote-off the remaining unamortized debt issuance costs of $0.4 million, which is included in depreciation and amortization expense in our consolidated statement of income for the three and nine months ended September 30, 2015. See Note 6 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion on the Equity Offering.

Lines of Credit

Lines of credit outstanding at September 30, 2015 and December 31, 2014 consist of the following (in thousands):



	September 30, 2015		December 31, 2014
Promissory note to Inwood National Bank (“Inwood”):
Direct finance leases A⁽¹⁾	$	—	$	662
Direct finance leases B⁽²⁾	—		899
John’s Creek⁽³⁾	—		12,500
Revolving credit facility⁽⁴⁾	13,960		—
Total lines of credit	$	13,960	$	14,061


(1)	During 2012, a subsidiary of JBGL opened a line of credit (“LOC”) issued by Inwood in the amount of $4.8 million maturing on April 13, 2014, bearing a minimum interest rate of 4.0%, which was in effect during the three months ended March 31, 2015, and collateralized by the leased assets. The LOC was renewed during 2014 until April 13, 2015. This LOC was paid off as of March 31, 2015.


(2)	During 2012, a subsidiary of JBGL opened a LOC issued by Inwood in the amount of $3.0 million maturing on September 15, 2014, bearing a minimum interest rate of 4.0%, which was in effect during the three months ended March 31, 2015, and collateralized by the leased assets. The LOC was renewed until April 13, 2015. This LOC was paid off as of March 31, 2015.

(3)

During 2012, a subsidiary of JBGL opened a LOC with Inwood in the amount of $8.0 million. On October 13, 2013, the JBGL subsidiary extended this revolving credit facility and increased the size from $8.0 million to $25.0 million maturing on October 13, 2014. Interest accrued and was payable monthly at a rate of 4.0%. The credit facility was renewed until October 13, 2015 and was secured by land owned in John’s Creek, Georgia. This LOC was replaced with a new revolving credit facility in July 2015.

(4)

On July 30, 2015, the Company replaced its John's Creek credit facility with a new revolving credit facility with Inwood, which provides for up to $50.0 million and is secured by land owned in John’s Creek, Georgia, Allen, TX, and Carrollton, TX. The maturity date for the new revolving credit facility is July 30, 2017. The costs associated with the new revolving credit facility of $0.4 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the new revolving credit facility using the effective interest method. Amounts outstanding under the new revolving credit facility is secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company's subsidiaries, including land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The amounts outstanding under the new revolving credit facility are also guaranteed by certain of the Company's subsidiaries.

The new revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 60% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 50% of the borrowing base. Outstanding borrowings under the new revolving credit facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the 30th day of each consecutive month thereafter until the revolving credit facility matures on July 30, 2017, the Company must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date.

In addition to the financial covenants described in footnote (4) to the table above, the new revolving credit facility with Inwood requires the Company to maintain minimum multiples of net worth in excess of the outstanding new revolving credit facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these covenants as of September 30, 2015.

Notes Payable

Notes payable outstanding at September 30, 2015 and December 31, 2014 consist of the following (in thousands):



	September 30, 2015		December 31, 2014
Note payable to unrelated third party:
Briar Ridge Investments, LTD⁽¹⁾	$	9,000	$	9,000
Lakeside DFW Land, LTD⁽²⁾	—		1,824
Lyons Equities, Inc. Trustee⁽³⁾	988		—
Centennial Park Richardson, LTD.⁽⁴⁾	304		—
Subordinated Lot Notes⁽⁵⁾	1,166		1,327
Total notes payable	$	11,458	$	12,151


(1)	On December 13, 2013, a subsidiary of JBGL signed a promissory note for $9 million maturing at December 13, 2017, bearing interest at 6.0% per annum and collateralized by land purchased in Allen, Texas. Accrued interest at September 30, 2015 was $0.

(2)

On April 15, 2013, a subsidiary of JBGL signed a promissory note for $3.5 million maturing on January 22, 2014, bearing interest at 6.0% per annum and collateralized by land located in Denton, Texas. This note was paid in full during 2014. On April 16, 2014, a new promissory note was signed for $3.3 million maturing on April 30, 2015 bearing interest at 5.0% collateralized by land located in Denton, Texas. $1.5 million of this note was repaid in July 2014. This note was paid in full during the three months ended March 31, 2015.


(3)	On May 22, 2015, a subsidiary of JBGL signed a promissory note for $1.0 million maturing on May 22, 2016, bearing interest at 3.5% per annum collateralized by land located in Allen, TX.


(4)	On July 20, 2015, a subsidiary of JBGL signed a promissory note for $0.3 million maturing on April 20, 2016, bearing interest at 0.0% per annum collateralized by land located in Richardson, TX. This note was paid in full in October 2015.

(5)

Subsidiaries of the Company purchased lots under various agreements from unrelated third parties. The sellers of these lots have subordinated a percentage of the lot purchase price to various construction loans of subsidiaries of the Company’s construction loans. Notes were signed in relation to the subordination bearing interest at between 8.0% and 14.0%, collateralized by liens on the homes built on each lot. The sellers will release their lien upon payment of principle plus accrued interest at the closing of each individual home to a third party buyer.