ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 28, 2018 Meritage Homes Corporation (the “Company”) entered into the Fourth Amendment to Amended and Restated Credit Agreement (the “Fourth Amendment”), which amends that certain Amended and Restated Credit Agreement, dated as of June 13, 2014 (the “Credit Agreement”), among the Company, the several banks and other financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent. Among other things, the Fourth Amendment (i) increases the total commitments available under the Credit Agreement from $625 million to $780 million, (ii) refreshes the accordion feature to allow the Company to increase the total commitments under the Credit Agreement by up to $100 million, (iii) slightly revises the applicable margin pricing grid, and (iv) extends the maturity date of the facility from July 9, 2021 to July 9, 2022.
The Fourth Amendment also resets the minimum consolidated tangible net worth floor to 70% of consolidated tangible net worth as of March 31, 2018. Except as described in the previous sentence, the Credit Agreement’s financial covenants were not modified in connection with the Fourth Amendment. As of the date of the Fourth Amendment, there were no borrowings outstanding under the Credit Agreement and the Company had outstanding letters of credit totaling approximately $78.0 million, leaving approximately $702.0 million available under the Credit Agreement to be drawn.
The foregoing description is qualified in its entirety by reference to Fourth Amendment, a copy of which is filed as an exhibit to this Current Report on Form 8-K and is incorporated by reference herein.