Homebuilding Senior Notes and Other Debts Payable

6 Months Ended

May 31, 2019

Homebuilding Senior Notes and Other Debts Payable



(Dollars in thousands)	May 31, 2019		November 30, 2018
Unsecured revolving credit facility	$	550,000	—
4.500% senior notes due 2019	499,981		499,585
4.50% senior notes due 2019	599,602		599,176
6.625% senior notes due 2020 (1)	307,701		311,735
2.95% senior notes due 2020	299,129		298,838
8.375% senior notes due 2021 (1)	427,378		435,897
4.750% senior notes due 2021	498,502		498,111
6.25% senior notes due December 2021 (1)	312,768		315,283
4.125% senior notes due 2022	597,390		596,894
5.375% senior notes due 2022 (1)	259,627		261,055
4.750% senior notes due 2022	571,104		570,564
4.875% senior notes due December 2023	396,156		395,759
4.500% senior notes due 2024	646,440		646,078
5.875% senior notes due 2024 (1)	450,496		452,833
4.750% senior notes due 2025	497,336		497,114
5.25% senior notes due 2026 (1)	408,527		409,133
5.00% senior notes due 2027 (1)	353,083		353,275
4.75% senior notes due 2027	892,672		892,297
0.25% convertible senior notes due 2019	—		1,291
Mortgage notes on land and other debt	823,049		508,950
	$	9,390,941	8,543,868

(1)

These notes were obligations of CalAtlantic when it was acquired, and were subsequently exchanged in part for notes of Lennar Corporation as follows: $267.7 million principal amount of 6.625% senior notes due 2020, $397.6 million principal amount of 8.375% senior notes due 2021, $292.0 million principal amount of 6.25% senior notes due 2021, $240.8 million principal amount of 5.375% senior notes due 2022, $421.4 million principal amount of 5.875% senior notes due 2024, $395.5 million principal amount of 5.25% senior notes due 2026 and $347.3 million principal amount of 5.00% senior notes due 2027. As part of purchase accounting, the senior notes have been recorded at their fair value as of the date of acquisition (February 12, 2018).

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $26.9 million and $31.2 million as of May 31, 2019 and November 30, 2018, respectively.

In April 2019, the Company amended the credit agreement governing its unsecured revolving credit facility (the "Credit Facility") to increase the commitments from $2.3 billion to $2.4 billion and extend the maturity one year to April 2024, with $50 million maturing in June 2020. The Credit Facility has a $400 million accordion feature, subject to additional commitments, thus the maximum borrowings are $2.8 billion. The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The credit agreement also provides that up to $500 million in commitments may be used for letters of credit. Under the Credit Facility agreement, the Company is required to maintain a minimum consolidated tangible net worth, a maximum leverage ratio and either a liquidity or an interest coverage ratio. These ratios are calculated per the Credit Facility agreement, which involves adjustments to GAAP financial measures. The Company believes it was in compliance with its debt covenants at May 31, 2019. In addition, the Company had $315 million of letter of credit facilities with different financial institutions.

The Company’s performance letters of credit outstanding were $663.0 million and $598.4 million, at May 31, 2019 and November 30, 2018, respectively. The Company’s financial letters of credit outstanding were $158.5 million and $165.4 million, at May 31, 2019 and November 30, 2018, respectively. Performance letters of credit are generally posted with regulatory bodies to guarantee the Company’s performance of certain development and construction activities. Financial letters of credit are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. Additionally, at May 31, 2019, the Company had outstanding surety bonds of $2.8 billion including performance surety bonds related to site improvements at various projects (including certain projects in the Company’s joint ventures) and financial surety bonds. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities are completed. As of May 31, 2019, there were approximately $1.3 billion, or 46%, of anticipated future costs to complete related to these site

improvements. The Company does not presently anticipate any draws upon these bonds or letters of credit, but if any such draws occur, the Company does not believe they would have a material effect on its financial position, results of operations or cash flows.

Subsequent to May 31, 2019, the Company redeemed $500 million aggregate principal amount of its 4.500% senior notes due June 2019. The redemption price, which was paid in cash, was 100% of the principal amount plus accrued but unpaid interest.

The Company's senior notes are guaranteed by substantially all of the Company's 100% owned homebuilding subsidiaries and some of the Company's other subsidiaries. Although the guarantees are full, unconditional and joint and several while they are in effect, (i) a subsidiary will cease to be a guarantor at any time when it is not directly or indirectly guaranteeing at least $75 million of debt of Lennar Corporation (the parent company), and (ii) a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed of.