This excerpt taken from the MTH 8-K filed Jul 29, 2008.
Amendment of credit facility improves flexibility and liquidity
At June 30, 2008, the Company had no borrowings outstanding under its credit facility. Meritages liquidity, consisting of borrowing capacity and cash, was $408 million, after considering the most restrictive covenants in place at that time.
In July, Meritage and its bank group amended the Companys credit facility to loosen its most restrictive borrowing covenants and modify its pricing structure. These modifications provide additional covenant cushion by relaxing the minimum interest coverage ratio and tangible net worth covenants, as well as the maximum leverage ratio covenant, should the housing recession be longer or deeper than anticipated. These modifications are intended to provide the Company greater flexibility to manage through this homebuilding cycle. The credit facility was reduced in size to $500 million, which management believes will be sufficient to support current operations for the foreseeable future.