Debt

The following table details the outstanding debt within the Company’s real estate and agribusiness operations (in thousands):



	March 31, 2015		December 31, 2014
Agribusiness term loan:
5.25% payments through 2017	$	76,075	$	77,567
Agribusiness working capital facility:
6.5% payments through 2017	5,000		6,350
Other agribusiness debt:
4.99% payments through 2018	121		128
Real estate debt:
3% to 4.75% payments through 2017	60,977		52,379
5% to 5.5% payments through 2016	4,961		6,918
Senior Notes: 8.5% payments through 2017	74,590		74,550
10% payments through 2017	1,604		1,604
Total debt	$	223,328	$	219,496

Debt Provisions, Restrictions, and Covenants on Real Estate Debt:

Certain of UCP’s debt agreements contain various significant financial covenants, each of which UCP was in compliance with at March 31, 2015 as follows.

1) Certain of UCP’s real estate debt include provisions that require minimum loan-to-value ratios. During the term of the loan, the lender may require UCP to obtain a third-party written appraisal of the underlying real estate collateral. If the appraised fair value of the collateral securing the loan is below the specified minimum, UCP may be required to make principal payments in order to maintain the required loan-to-value ratios. As of March 31, 2015, the lenders have not requested and UCP has not obtained any such appraisals.

2) The $75 million of senior notes issued in 2014 by UCP limit UCP’s ability to, among other things, incur or guarantee additional unsecured and secured indebtedness (provided that UCP may incur indebtedness so long as UCP’s ratio of indebtedness to its consolidated tangible assets (on a pro forma basis) would be equal to or less than 45% and provided that the aggregate amount of secured debt may not exceed the greater of $75 million or 30% of UCP’s consolidated tangible assets); pay dividends and make certain investments and other restricted payments; acquire unimproved real property in excess of $75 million per fiscal year or in excess of $150 million over the term of the notes, except to the extent funded with subordinated obligations or the proceeds of equity issuances; create or incur certain liens; transfer or sell certain assets; and merge or consolidate with other companies or transfer or sell all or substantially all of UCP’s consolidated assets.

Additionally, the senior notes require UCP to maintain the following significant covenants, each of which UCP was in compliance with at March 31, 2015.


1)	Minimum Unlevered Asset Pool: UCP must maintain $50 million of consolidated tangible assets not subject to liens securing indebtedness. At March 31, 2015, UCP’s consolidated tangible assets not subject to liens securing indebtedness was $199.8 million.


2)	Minimum Net Worth: UCP must maintain a minimum net worth of $175 million. At March 31, 2015, UCP’s minimum net worth was $220.9 million.


3)	Minimum Liquidity: UCP must maintain a minimum of $15 million of unrestricted cash and/or cash equivalents. At March 31, 2015, UCP’s unrestricted cash and/or cash equivalents was $34.4 million.


4)	Decrease in Consolidated Tangible Assets: UCP may not permit decreases in the amount of consolidated tangible assets by more than:

a) $25 million in any fiscal year. For the three months ended March 31, 2015, UCP’s consolidated tangible assets decreased $690,000.

b) $50 million at any time. Since October 21, 2014, UCP’s consolidated tangible assets increased $69.3 million.

Debt Covenants on Agribusiness Debt:

Northstar’s debt agreement contains the following significant financial covenants, each of which Northstar was in compliance with at March 31, 2015.


1)	Debt to Adjusted Capitalization Ratio: Northstar will not permit its debt to adjusted capitalization ratio as of the last day of any quarter to be more than 0.60 to 1.00. At March 31, 2015, Northstar’s ratio was approximately 0.60.

Debt Service Coverage Ratio: Beginning on January 1, 2015, Northstar will not permit its debt service coverage ratio to be less than 1.25 to 1.00; provided, however, that if Northstar is not in compliance with the covenant, Northstar shall be considered in compliance if the debt service coverage ratio is not less than 1.00 to 1.00 as of the last day of any quarter. At March 31, 2015, Northstar’s ratio was approximately 1.32 to 1.00.


3)	Minimum Net Worth of Borrower: Northstar will not permit its net worth on any date to be less than $50 million. At March 31, 2015, Northstar’s net worth was approximately $54.1 million.

Other:

As of March 31, 2015, the Company had approximately $108.6 million of unused loan commitments within the real estate operations and $22 million in the agribusiness operations.

The Company capitalized $2.6 million and $410,000 of interest during the three months ended March 31, 2015 and 2014, respectively, related to construction and real estate development costs.