Debt, net

Debt consists of:



	Second Quarter-End		Year-End
	2017		2016
	(In thousands)
8.50% senior secured notes due 2022, net	$	5,211	$	5,200
3.75% convertible senior notes due 2020, net of discount	106,900		104,673
Other indebtedness — 5.50% interest rate	1,257		485
	$	113,368	$	110,358

On May 12, 2017, we amended our senior secured credit facility to reduce the available line of credit commitment from $125,000,000 to $50,000,000, none of which was drawn at second quarter-end 2017. The senior secured credit facility matures on May 15, 2018 (following exercise of our one-year extension option on May 12, 2017). This revolving line of credit may be prepaid at any time without penalty and includes a $50,000,000 sublimit for letters of credit, of which $15,719,000 was outstanding at second quarter-end 2017. Total borrowings under our senior secured credit facility (including the face amount of letters of credit) may not exceed a borrowing base formula. At second quarter-end 2017, we had $14,240,000 in net unused borrowing capacity under our senior secured credit facility.

Under the terms of our senior secured credit facility, at our option we can borrow at LIBOR plus 4.0 percent or at the alternate base rate plus 3.0 percent. The alternate base rate is the highest of (i) KeyBank National Association’s base rate, (ii) the federal funds effective rate plus 0.5 percent or (iii) 30 day LIBOR plus 1 percent. Borrowings under the senior secured credit facility are or may be secured by (a) high value timberland and portions of raw entitled land (b) assignments of current and future leases, rents and contracts, (c) a security interest in our primary operating account, (d) a pledge of the equity interests in current and future material operating subsidiaries and most of our majority-owned joint venture interests, or if such pledge is not permitted, a pledge of the right to distributions from such entities, and (e) a pledge of certain reimbursements payable to us from special improvement district tax collections in connection with our Cibolo Canyons project. The senior secured credit facility provides for releases of real estate and other collateral provided that borrowing base compliance is maintained.

Our debt agreements contain financial covenants customary for such agreements including minimum levels of interest coverage and limitations on leverage. At second quarter-end 2017, we were in compliance with the financial covenants of these agreements. The proposed D.R. Horton Merger is expected to constitute a “fundamental change” under our 3.75% convertible senior notes, which would provide holders with the right to convert their notes or sell their notes to us at par, subject to certain conditions. In addition, absent lender consent, the proposed D.R. Horton Merger would constitute an event of default under our senior secured credit facility and we are currently in discussions with our lenders regarding a potential waiver as well as certain other alternatives.

We may elect to make distributions to stockholders so long as the total leverage ratio is less than 40 percent, the interest coverage ratio is greater than 3.0:1.0 and available liquidity is not less than $125,000,000, all of which were satisfied at second quarter-end 2017. Regardless of whether the foregoing conditions are satisfied, we may make distributions in an aggregate amount not to exceed $50,000,000 to be funded from up to 65 percent of the net proceeds from sales of multifamily properties and non-core assets, such as the Radisson Hotel & Suites in Austin, and any oil and gas properties.

At second quarter-end 2017 and year-end 2016, we had $1,393,000 and $1,633,000 in unamortized deferred financing fees which were deducted from our debt. In addition, at second quarter-end 2017 and year-end 2016, unamortized deferred financing fees related to our senior secured credit facility included in other assets were $129,000 and $314,000. Amortization of deferred financing fees were $574,000 and $1,877,000 in first six months 2017 and 2016 and were included in interest expense.