D.R. Horton disclosed late Monday that it had amended its revolving credit facility to eliminate an interest coverage ratio trigger and lower its required net-worth minimum in exchange for lowering the total amount available and agreeing to pay higher rates if the ratio falls below 2 to 1.

In an 8K filing with the Securities and Exchange Commission, Horton said the amendment would "decrease the company's required tangible net worth minimum to $3.5 billion plus 50% of annual net profits (with no deduction for annual net losses) earned for each completed fiscal year subsequent to September 30, 2007 plus 50% of increases in shareholders equity from certain equity transactions, to the date of determination." It also took the maximum leverage ratio down from 60% to 55% and cut the facility size from$2.5 billion to $2.25 billion, with an uncommitted accordion feature which can increase the facility size to $2.65 billion.

But the amendment "no longer contains an interest coverage ratio covenant that could create an event of default for the company," Horton said in the filing. It agreed with lenders, represented by Wachovia Bank as the administrative agent, that if the ratio is less than 2.0 to 1, it will result in pricing increases in increments ranging from 0.125% to 0.650%. If it falls to less than 1.5 to 1 for two consecutive quarters, "the company must maintain adjusted cash flow from operations...to interest incurred...of 1.50 to 1, or maintain loan funding availability...plus unrestricted cash and cash equivalents, without duplication, of $500 million or greater."