Loans Payable, Senior Notes, and Mortgage Company Loan Facility

Loans Payable

At July 31, 2016 and October 31, 2015, loans payable consisted of the following (amounts in thousands):



	July 31, 2016			October 31, 2015
Senior unsecured term loan	$	500,000		$	500,000
Credit facility borrowings	450,000			350,000
Loans payable – other	109,627			151,702
Deferred issuance costs	(971		)	(1,263		)
	$	1,058,656		$	1,000,439

Senior Unsecured Term Loan

On February 3, 2014, we entered into a five-year senior, $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.

On May 19, 2016, we entered into an amendment to the Term Loan Facility to, among other things, (1) amend the financial maintenance covenants therein to be substantially the same as the financial maintenance covenants applicable under the New Credit Facility described below and (2) revise certain provisions relating to the interest rate applicable on outstanding borrowings. Under the amended Term Loan Facility, the interest rate on borrowings at July 31, 2016 was 1.89% 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 our New Credit Facility, as described below. The Term Loan Facility was scheduled to mature on February 3, 2019. Subsequent to July 31, 2016, we amended the Term Loan Facility to extend the maturity date from February 3, 2019 to August 2, 2021.

Credit Facility

On August 1, 2013, we entered into a $1.035 billion, unsecured, five-year revolving credit facility (the “Credit Facility”). The commitments under the Credit Facility were scheduled to expire on August 1, 2018. On May 19, 2016, we entered into a new $1.215 billion (subsequently increased to $1.295 billion), unsecured, five-year revolving credit facility (the “New Credit Facility”) with a syndicate of banks (the “Aggregate Credit Commitment”) and terminated the Credit Facility. The commitments under the New Credit Facility are scheduled to expire on May 19, 2021. We are obligated to pay an undrawn commitment fee to the lenders under the New Credit Facility, which is based on the average daily unused amount of the Aggregate Credit Commitment and our leverage ratio. Any proceeds from borrowings under the New Credit Facility can be used for general corporate purposes. We and substantially all of our 100%-owned home building subsidiaries are guarantors under the New Credit Facility.

Under the terms of the New 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 agreement) of no less than approximately $2.61 billion. Under the terms of the New Credit Facility, at July 31, 2016, our leverage ratio was approximately 0.84 to 1.00, and our tangible net worth was approximately $4.12 billion. Based upon the minimum tangible net worth requirement in the New Credit Facility, our ability to repurchase our common stock was limited to approximately $2.14 billion as of July 31, 2016.

At July 31, 2016, we had $450.0 million of outstanding borrowings under the New Credit Facility and had outstanding letters of credit of approximately $80.0 million under the New Credit Facility. Subsequent to July 31, 2016, we repaid $100.0 million of the outstanding balance under the New Credit Facility. At July 31, 2016, the interest rate on borrowings under the New Credit Facility was 1.97% per annum.

Loans Payable – Other

Our “Loans payable – other” represent purchase money mortgages on properties we acquired that the seller had financed and various revenue bonds that were issued by government entities on our behalf to finance community infrastructure and our manufacturing facilities. At July 31, 2016, the weighted-average interest rate on “Loans payable – other” was 3.98% per annum.

Senior Notes

At July 31, 2016, we, through Toll Brothers Finance Corp., had eight issues of Senior Notes outstanding with an aggregate principal amount of $2.71 billion.

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 the 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.

Mortgage Company Loan Facility

In July 2016, 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 $85.0 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 $125.0 million for a short period of time. The Repurchase Agreement, as amended, expires on July 13, 2017, and borrowings thereunder bear interest at LIBOR plus 2.00% per annum, with a minimum rate of 2.00%. At July 31, 2016, the interest rate on the Repurchase Agreement was 2.50% per annum. In addition, we are subject to an under usage fee based on outstanding balances, as defined in the Repurchase Agreement. At July 31, 2016, we had $125.0 million of outstanding borrowings under the Repurchase Agreement.