Loans Payable, Senior Notes, and Mortgage Company Loan Facilities

9 Months Ended

Jul. 31, 2025

Loans Payable, Senior Notes, and Mortgage Company Loan Facilities

Loans Payable

At July 31, 2025 and October 31, 2024, loans payable consisted of the following (amounts in thousands):


	July 31, 2025		October 31, 2024
Senior unsecured term loan	$	650,000	$	650,000

Loans payable – other	404,726		437,969
Deferred issuance costs	(3,231)		(2,152)
	$	1,051,495	$	1,085,817

Senior Unsecured Term Loan

We are party to a $650.0 million senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks. On February 7, 2025, we entered into an amendment to the Term Loan Facility to extend the maturity date of all $650.0 million of outstanding term loans to February 7, 2030. No principal payments are required before the stated maturity date. Under the Term Loan Facility, we may select interest rates equal to (i) the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin, (ii) the base rate (as defined in the agreement) plus an applicable margin, or (iii) the federal funds/Euro rate (as defined in the agreement) plus an applicable margin, in each case, based on our leverage ratio. At July 31, 2025, the interest rate on the Term Loan Facility was 5.20% per annum. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Revolving Credit Facility described below.

In November 2020, we entered into five interest rate swap transactions to hedge $400.0 million of the Term Loan Facility through October 31, 2025. The interest rate swaps effectively fix the interest cost on the $400.0 million at 0.369% plus the spread set forth in the pricing schedule in the Term Loan Facility, which was 0.90% as of July 31, 2025. These interest rate swaps were designated as cash flow hedges.

Revolving Credit Facility

We are party to a $2.35 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks. On February 7, 2025, we increased the total amount of revolving loans and commitments available under the Revolving Credit Facility from $1.96 billion to $2.35 billion and extended the maturity date to February 7, 2030. The Revolving Credit Facility provides us with a committed borrowing capacity of $2.35 billion, which we have the ability to increase up to $3.00 billion with the consent of lenders. Under the Revolving Credit Facility, up to 50% of the commitment is available for letters of credit. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility.

Both our Revolving Credit Facility and Term Loan Facility require us to maintain certain financial covenants, which include not exceeding a defined maximum leverage ratio and maintaining a minimum tangible net worth. In addition, our ability to repurchase our common stock and pay cash dividends is limited by these agreements. However, during the three-month and nine-month periods ended July 31, 2025, these limitations did not meaningfully restrict our ability to pay cash dividends or repurchase stock. We were in compliance with all covenants and requirements as of July 31, 2025.

At July 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility and had approximately $158.5 million of outstanding letters of credit that were issued under the Revolving Credit Facility. At July 31, 2025, the interest rate on outstanding borrowings under the Revolving Credit Facility, which is a variable rate, would have been 5.50% per annum.

Loans Payable – Other

“Loans payable – other” primarily represents purchase money mortgages on properties we acquired that the seller had financed, project-level financing, and various revenue bonds that were issued by government entities on our behalf to finance community infrastructure and our manufacturing facilities. At July 31, 2025, the weighted-average interest rate on “Loans payable – other” was 5.49% per annum.

Senior Notes

At July 31, 2025, we had four issues of fixed rate senior notes outstanding with an aggregate principal amount of $1.75 billion.

In June 2025, we issued $500.0 million principal amount of 5.600% Senior Notes due 2035. We received $494.9 million of net proceeds from the issuance of these senior notes. On July 15, 2025, we redeemed, prior to maturity, the $350.0 million of then-outstanding principal amount of 4.875% Senior Notes due November 15, 2025, at par, plus accrued interest and a nominal prepayment fee.

Mortgage Company Loan Facilities

During fiscal 2023 and until December 2023, our wholly-owned mortgage subsidiary, Toll Brothers Mortgage Company (“TBMC”), was party to a mortgage warehousing facility that contained substantially the same terms as those described in the paragraph below.

On December 5, 2023, TBMC executed a new Warehousing Agreement (“New Warehousing Agreement”) with a bank that provides for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the New Warehousing Agreement provides for an accordion feature under which TBMC may request that the aggregate commitments under the New Warehousing Agreement be increased to an amount up to $150.0 million for a short period of time. The New Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” TBMC is also subject to an under-usage fee based on outstanding balances, as defined in the New Warehousing Agreement. Prior to its scheduled expiration on December 3, 2024, the New Warehousing Agreement was amended to extend the expiration date to December 2, 2025. No other changes were made to the terms of the New Warehousing Agreement as a result of the amendment. The New Warehousing Agreement bears interest at SOFR plus 1.75% per annum (with a SOFR floor of 2.50%). At July 31, 2025, the interest rate on the New Warehousing Agreement was 6.08% per annum.