ZILLOW GROUP INC

Note 7. Debt

The following table presents the carrying values of Zillow Group’s debt as of the dates presented (in millions):

Credit Facilities

We utilize master repurchase agreements to provide capital for Zillow Home Loans. The following table summarizes certain details related to our outstanding master repurchase agreements as of June 30, 2024 (in millions, except interest rates):

On May 2, 2024, the Zillow Home Loans master repurchase agreement with JPMorgan Chase Bank, N.A. was amended and renewed. The amended master repurchase agreement increased the total maximum borrowing capacity from $100 million to $150 million, $1 million of which is committed, and is scheduled to expire on May 1, 2025.

In accordance with the master repurchase agreements, the Lenders agreed to pay Zillow Home Loans a negotiated purchase price for eligible loans, and Zillow Home Loans simultaneously agreed to repurchase such loans from the Lenders under a specified timeframe at an agreed upon price that includes interest. The master repurchase agreements contain margin call provisions that provide the Lenders with certain rights in the event of a decline in the market value of the assets purchased under the master repurchase agreements. As of June 30, 2024 and December 31, 2023, $190 million and $99 million, respectively, in mortgage loans held for sale were pledged as collateral under the master repurchase agreements.

Borrowings on the master repurchase agreements bear interest at a floating rate based on SOFR plus an applicable margin, as defined by the governing agreements. The master repurchase agreements include customary representations and warranties, covenants and provisions regarding events of default. As of June 30, 2024, Zillow Home Loans was in compliance with all financial covenants and no event of default had occurred. The master repurchase agreements are recourse to Zillow Home Loans, and have no recourse to Zillow Group or any of its other subsidiaries.

For additional details related to our repurchase agreements, see Note 11 in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Convertible Senior Notes

The following tables summarize certain details related to our outstanding Notes as of the dates presented or for the periods ended (in millions, except interest rates):

The Notes are senior unsecured obligations. The 2026 Notes are classified as long-term debt and the 2025 Notes and 2024 Notes are classified as current liabilities in our condensed consolidated balance sheets based on their contractual maturity dates. Interest on the convertible notes is paid semi-annually in arrears. The estimated fair value of the Notes is classified as Level 2 and was determined through consideration of quoted market prices in markets that are not active.

The Notes are convertible into cash, shares of Class C capital stock or a combination thereof, at our election, and may be settled as described below. They will mature on their respective maturity dates, unless earlier repurchased, redeemed or converted in accordance with their terms. The following table summarizes the conversion and redemption options with respect to the Notes:

During the three months ended June 30, 2024 and in accordance with our Repurchase Authorizations, we repurchased $88 million aggregate principal amount of the 2025 Notes through open market transactions for $89 million in cash, including accrued interest, resulting in a loss on extinguishment of debt of $1 million recognized in our condensed consolidated statements of operations. For additional information on the Repurchase Authorizations, see Note 9 under the subsection titled “Share Repurchase Authorizations.”

The following table summarizes certain details related to the capped call confirmations with respect to the convertible senior notes:

The last reported sale price of our Class C capital stock did not equal or exceed 130% of the conversion price of any series of the Notes for at least 20 trading days during the 30 consecutive trading days ended June 30, 2024. Accordingly, the 2025 Notes and 2026 Notes are not convertible at the option of the holders during the three months ending September 30, 2024. On or after March 1, 2024, until the close of business on the second scheduled trading day immediately preceding the applicable Maturity Date, holders may convert the 2024 Notes at their option at the applicable Conversion Rate then in effect. Any conversions of the 2024 Notes will be settled on the applicable Maturity Date.

For additional details related to our convertible senior notes, see Note 11 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.