Debt

The following table details the Company’s outstanding debt (in thousands):



	September 30, 2015		December 31, 2014
No stated interest, payments through 2017	$	1,935
3% to 4.75% payments through 2017	82,308		$	52,379
5% to 5.5% payments through 2017	5,633		6,918
8% payments through 2018	4,000
Senior Notes: 8.5% payments through 2017	74,670		74,550
10% payments through 2017	1,604		1,604
Total debt	$	170,150	$	135,451

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 September 30, 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 September 30, 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 September 30, 2015.


1)	Minimum Unlevered Asset Pool: UCP must maintain $50 million of consolidated tangible assets not subject to liens securing indebtedness. At September 30, 2015, UCP’s consolidated tangible assets not subject to liens securing indebtedness was $167.1 million.


2)	Minimum Net Worth: UCP must maintain a minimum net worth of $175 million. At September 30, 2015, UCP’s minimum net worth was $236.1 million.


3)	Minimum Liquidity: UCP must maintain a minimum of $15 million of unrestricted cash and/or cash equivalents. At September 30, 2015, UCP’s unrestricted cash and/or cash equivalents was $22.6 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 nine months ended September 30, 2015, UCP’s consolidated tangible assets increased $42.6 million.

b) $50 million at any time. Since October 21, 2014, UCP’s consolidated tangible assets increased $112.5 million.

Other:

As of September 30, 2015, the Company had approximately $92.1 million of unused loan commitments within the real estate operations. As of December 31, 2014, the Company had approximately $87.3 million of unused loan commitments within the real estate operations.

The Company capitalized $3.1 million and $8.5 million of interest during the three and nine months ended September 30, 2015, respectively, and $701,000 and $1.6 million of interest during the three and nine months ended September 30, 2014, respectively, related to construction and real estate development costs.