United Homes enters $240 million three-year restated revolver

By Marisa Wong

Los Angeles, Aug. 11 – United Homes Group, Inc. entered into a second amended and restated credit agreement on Aug. 10 for an up to $240 million three-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Wholly owned subsidiary Great Southern Homes, Inc. is the borrower.

Wells Fargo Bank, NA is the administrative agent, and Wells Fargo Securities, LLC is the lead arranger and bookrunner.

The credit agreement amends and restates the company’s amended and restated credit agreement dated March 30, 2023.

The amended credit facility includes a $2 million letter-of-credit sub-facility and matures on Aug. 10, 2026.

Borrowings bear interest at SOFR plus an applicable margin ranging from 275 basis points to 350 bps based on the company’s leverage ratio.

The company also pays a fee ranging between 15 bps and 30 bps per annum depending on the unused amount of the facility.

In addition, the facility contains some financial covenants:

• The borrower must maintain minimum tangible net worth of no less than the sum of (i) $70 million, (ii) 25% of positive consolidated earnings earned in any fiscal quarter ending on or after Sept. 30, (iii) 100% of new equity contributed to the borrower following the effective date, (iv) 100% of any increase in tangible net worth resulting from an equity issuance upon the conversion or exchange of any security constituting debt that is convertible or exchangeable, or is being converted or exchanged, for equity interests; and (v) 100% of the amount of any repurchase of equity interests in the borrower;

• A maximum leverage covenant that prohibits the leverage ratio from exceeding 2.50 to 1.00 for any fiscal quarter until Dec. 31, or 2.25 to 1.00 thereafter;

• A minimum debt service coverage ratio of 2.50 to 1.00 as of the end of each fiscal quarter;

• Minimum liquidity of not less than the greater of $20 million or an amount equal to 1.5 times the trailing 12-month interest accrued, at all times; and

• Unrestricted cash of not less than 50% of the liquidity required, at all times.

The homebuilder is based in Irmo, S.C.

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