M/I Homes amends loan, cutting size, changing covenants, lifting pricing

By Sara Rosenberg

New York, Jan. 20 - M/I Homes Inc. amended its credit facility, reducing the size to $150 million from $250 million, revising covenants and raising pricing, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Under the amendment, the size of the facility will further reduce to $125 million if the company's consolidated tangible net worth falls below $250 million, to $100 million if net worth falls below $200 million, and to $60 million if net worth falls below $150 million.

The permitted leverage ratio was changed to an event of default should it be less than 2.00 times and the consolidated minimum tangible net worth definition was revised.

Pricing on the facility can now range from Libor plus 450 basis points to 525 bps and the commitment fee can now range from 45 bps to 50 bps, depending on minimum consolidated tangible net worth.

In addition, the amendment increased percentage of speculative units allowed based on latest six and 12-month closings, and increased limitations on joint venture investments and extensions of credit in connection with the sale of land.

Furthermore, the amendment requires secured borrowing based on a secured borrowing base, and provides for $65 million of availability during the initial period, which goes to July 20, with three one-month extension options. However, during the initial period, any cash in excess of $25 million will be designated as collateral.

The amendment was completed on Jan. 15.

JPMorgan is the agent on the deal.

M/I Homes is a Columbus, Ohio-based builder of single-family homes.

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