Loans Payable, Senior Notes, and Mortgage Company Loan Facility

Loans Payable

At October 31, 2015 and 2014, loans payable consisted of the following (amounts in thousands):



	2015			2014
Senior unsecured term loan	$	500,000		$	500,000
Credit facility borrowings	350,000
Loans payable – other	151,702			154,261
Deferred issuance costs	(1,263		)	(1,642		)
	$	1,000,439		$	652,619

Senior Unsecured Term Loan

On February 3, 2014, we entered into a five-year, $485.0 million, unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks. We borrowed the full amount of the Term Loan Facility on February 3, 2014. In October 2014, we increased the Term Loan Facility by $15.0 million and borrowed the full amount of the increase.

We may select interest rates for the Term Loan Facility equal to (i) London Interbank Offered Rate (“LIBOR”) plus an applicable margin, (ii) the base rate (which is defined as the greatest of (a) SunTrust Bank’s prime rate, (b) the federal funds effective rate plus 0.5%, and (c) one-month LIBOR plus 1%) plus an applicable margin, or (iii) the federal funds/Euro rate (which is defined as the greater of (a) the sum of the federal funds effective rate plus an applicable margin plus 0.25%, and (b) one-month LIBOR), with the applicable margin, in each case, based on our leverage ratio. At October 31, 2015, the interest rate on the Term Loan Facility was 1.60% per annum.

We and substantially all of our 100%-owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Credit Facility, as described below. The Term Loan Facility will mature, and amounts owing thereunder will become due and payable, on February 3, 2019.

Credit Facility

On August 1, 2013, we entered into a $1.035 billion unsecured, five-year revolving credit facility (“Credit Facility”) with a syndicate of banks (“Aggregate Credit Commitment”). The commitments under the Credit Facility are schedule to expire on August 1, 2018. Up to 75% of the Aggregate Credit Commitment is available for letters of credit. The Credit Facility has an accordion feature under which we may, subject to certain conditions set forth in the agreement, increase the Credit Facility up to a maximum aggregate amount of $2.0 billion. We may select interest rates for the Credit Facility equal to (i) LIBOR plus an applicable margin or (ii) the lenders’ base rate plus an applicable margin, which in each case is based on our credit rating and leverage ratio. At October 31, 2015, the interest rate on outstanding borrowings under the Credit Facility was 1.70% per annum. We are obligated to pay an undrawn commitment fee that is based on the average daily unused amount of the Aggregate Credit Commitment and our credit ratings and leverage ratio. Any proceeds from borrowings under the Credit Facility may be used for general corporate purposes. We and substantially all of our 100%-owned home building subsidiaries are guarantors under the Credit Facility.

Under the terms of the Credit Facility, our maximum leverage ratio (as defined in the Credit Agreement) may not exceed 1.75 to 1.00 and we are required to maintain a minimum tangible net worth (as defined in the Credit Facility) of no less than approximately $2.64 billion. Under the terms of the Credit Facility, at October 31, 2015, our leverage ratio was approximately 0.68 to 1.00 and our tangible net worth was approximately $4.19 billion. Based upon the minimum tangible net worth requirement, our ability to repurchase our common stock was limited to approximately $1.97 billion as of October 31, 2015.

At October 31, 2015, we had $350.0 million of outstanding borrowings under the Credit Facility and had outstanding letters of credit of approximately $118.9 million. Subsequent to October 31, 2015, we repaid all $350.0 million borrowed under the Credit Facility.

Loans Payable – Other

Our “Loans payable – other” represent purchase money mortgages on properties we had acquired that the seller had financed and various revenue bonds that were issued by government entities on behalf of us to finance community infrastructure and our manufacturing facilities. Information regarding our loans payable at October 31, 2015 and 2014, is included in the table below ($ amounts in thousands):



	2015			2014
Aggregate loans payable at October 31	$	151,702		$	154,261
Weighted-average interest rate	3.78		%	4.34		%
Interest rate range	0.15% - 7.87%			0.15% - 7.87%
Loans secured by assets
Carrying value of loans secured by assets	$	151,702		$	154,111
Carrying value of assets securing loans	$	378,864		$	428,122

The contractual maturities of loans payable – other as of October 31, 2015, ranged from less than one month to 31 years.

Senior Notes

At October 31, 2015 and 2014, senior notes consisted of the following (amounts in thousands):



	2015			2014
5.15% Senior Notes due May 15, 2015				$	300,000
8.91% Senior Notes due October 15, 2017	$	400,000		400,000
4.00% Senior Notes due December 31, 2018	350,000			350,000
6.75% Senior Notes due November 1, 2019	250,000			250,000
5.875% Senior Notes due February 15, 2022	419,876			419,876
4.375% Senior Notes due April 15, 2023	400,000			400,000
5.625% Senior Notes due January 15, 2024	250,000			250,000
4.875% Senior Notes due November 15, 2025	350,000
0.5% Exchangeable Senior Notes due September 15, 2032	287,500			287,500
Bond discount and deferred issuance costs	(17,575		)	(19,135		)
	$	2,689,801		$	2,638,241

As discussed in Note 1, “Significant Accounting Policies - Recent Accounting Pronouncements,” we adopted ASU 2015-03 on October 31, 2015. We applied the new guidance retrospectively to all prior periods presented in the financial statements to conform to the fiscal 2015 presentation. As a result, $16.8 million of Senior Note deferred debt issuance costs at October 31, 2014, were reclassified from “Receivables, prepaid expenses, and other assets” to “Senior Notes” in our Consolidated Balance Sheets.

The senior notes are the unsecured obligations of Toll Brothers Finance Corp., our 100%-owned subsidiary. The payment of principal and interest is fully and unconditionally guaranteed, jointly and severally, by us and substantially all of our 100%-owned home building subsidiaries (together with Toll Brothers Finance Corp., the “Senior Note Parties”). The senior notes rank equally in right of payment with all the Senior Note Parties’ existing and future unsecured senior indebtedness, including the Credit Facility and the Term Loan Facility. The senior notes are structurally subordinated to the prior claims of creditors, including trade creditors, of our subsidiaries that are not guarantors of the senior notes. The senior notes, other than the 0.5% Exchangeable Senior Notes due 2032 (“0.5% Exchangeable Senior Notes”), are redeemable in whole or in part at any time at our option, at prices that vary based upon the then-current rates of interest and the remaining original term of the notes.

The 0.5% Exchangeable Senior Notes are not redeemable by us prior to September 15, 2017. The 0.5% Exchangeable Senior Notes are exchangeable into shares of our common stock at an exchange rate of 20.3749 shares per $1,000 principal amount of notes, corresponding to an initial exchange price of approximately $49.08 per share of common stock. If all of the 0.5% Exchangeable Senior Notes are exchanged, we would issue approximately 5.9 million shares of our common stock. Shares issuable upon conversion of the 0.5% Exchangeable Senior Notes are included in the calculation of diluted earnings per share. Holders of the 0.5% Exchangeable Senior Notes will have the right to require Toll Brothers Finance Corp. to repurchase their notes for cash equal to 100% of their principal amount, plus accrued but unpaid interest, on each of December 15, 2017; September 15, 2022; and September 15, 2027. Toll Brothers Finance Corp. will have the right to redeem the 0.5% Senior Notes on or after September 15, 2017, for cash equal to 100% of their principal amount, plus accrued but unpaid interest.

In October 2015, we issued $350.0 million aggregate principal amount of 4.875% Senior Notes due 2025 (the “4.875% Senior Notes”) at par. We received $347.7 million of net proceeds from this issuance of 4.875% Senior Notes.

In May 2015, we repaid, at maturity, the $300.0 million of then-outstanding principal amount of 5.15% Senior Notes due May 15, 2015.

In March 2014, we repaid, at maturity, the $268.0 million of the then-outstanding principal amount of 4.95% Senior Notes due March 15, 2014.

In November 2013, we issued $350.0 million aggregate principal amount of 4.0% Senior Notes due 2018 (the “4.0% Senior Notes”) and $250.0 million aggregate principal amount of 5.625% Senior Notes due 2024 (the “5.625% Senior Notes”). We received $596.2 million of net proceeds from the issuance of the 4.0% Senior Notes and the 5.625% Senior Notes.

In September 2013, we repaid, at maturity, the then-outstanding principal amount of $104.8 million of our 5.95% Senior Notes due September 15, 2013.

In April 2013, we issued $300.0 million aggregate principal amount of 4.375% Senior Notes due 2023 (the “4.375% Senior Notes”) at par. We received $298.1 million of net proceeds from this issuance of 4.375% Senior Notes.

In May 2013, we issued an additional $100.0 million aggregate principal amount of 4.375% Senior Notes at a price equal to 103% of par value. We received $102.3 million of net proceeds from this additional issuance of 4.375% Senior Notes.

In November 2012, we repaid, at maturity, the $59.1 million of the then-outstanding principal amount of 6.875% Senior Notes due November 15, 2012.

Mortgage Company Loan Facility

In July 2015, TBI Mortgage^® Company (“TBI Mortgage”), our wholly owned mortgage subsidiary, amended its Master Repurchase Agreement (the “Repurchase Agreement”) with Comerica Bank. The purpose of the Repurchase Agreement is to finance the origination of mortgage loans by TBI Mortgage, and the Repurchase Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” The Repurchase Agreement, as amended, provides for loan purchases up to $50 million, subject to certain sublimits. In addition, the Repurchase Agreement provides for an accordion feature under which TBI Mortgage may request that the aggregate commitments under the Repurchase Agreement be increased to an amount up to $100 million for a short period of time. The Repurchase Agreement, as amended, expires on July 18, 2016, and borrowings thereunder bear interest at LIBOR plus 2.00% per annum, with a minimum rate of 2.00%. At October 31, 2015, the interest rate on the Repurchase Agreement was 2.19% per annum. In addition, we are subject to an under usage fee based on outstanding balances, as defined in the Repurchase Agreement. Borrowings under this facility are included in the fiscal 2016 maturities.

At October 31, 2015 and 2014, there were $100.0 million and $90.3 million, respectively, outstanding under the Repurchase Agreement, which are included in liabilities in our Consolidated Balance Sheets. At October 31, 2015 and 2014, amounts outstanding under the Repurchase Agreement were collateralized by $115.9 million and $93.9 million, respectively, of mortgage loans held for sale, which are included in assets in our Consolidated Balance Sheets. As of October 31, 2015, there were no aggregate outstanding purchase price limitations reducing the amount available to TBI Mortgage. There are several restrictions on purchased loans under the Repurchase Agreement, including that they cannot be sold to others, they cannot be pledged to anyone other than the agent, and they cannot support any other borrowing or repurchase agreements.

General

As of October 31, 2015, the annual aggregate maturities of our loans and notes during each of the next five fiscal years are as follows (amounts in thousands):



	Amount
2016	$	166,497
2017	$	419,480
2018	$	364,541
2019	$	860,535
2020	$	253,290