8-KOther Events

HORTON D R INC /DE/ 8-K Report (Feb 1, 2002)

Filed February 1, 2002For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced on January 31, 2002, the establishment of a new four-year, unsecured, revolving credit facility. This facility replaces a prior one set to mature in April 2002 and provides the company with substantial liquidity to support its ongoing operations and growth strategies. The new credit facility underscores the company's access to capital markets and its commitment to maintaining a strong financial foundation. The new credit facility offers up to $775 million in revolving loans, with a portion designated for letters of credit, and is expected to increase following a pending acquisition. The terms are based on a fluctuating interest rate tied to LIBOR, and include covenants similar to the previous agreement, indicating stable financial management. This proactive refinancing demonstrates prudent financial planning by D.R. Horton.

Key Highlights

  • 1D.R. Horton secured a new four-year, unsecured, revolving credit facility effective January 31, 2002.
  • 2The new facility replaces a credit line that was scheduled to mature in April 2002.
  • 3The total borrowing capacity under the new facility is up to $775 million.
  • 4$125 million of the facility can be used for letters of credit.
  • 5The facility's capacity is expected to increase by $20 million upon the closing of the Schuler Homes, Inc. acquisition.
  • 6Borrowings will bear interest at a fluctuating rate based on LIBOR, with an initial rate of 1.625% over LIBOR.
  • 7The new credit agreement includes covenants generally similar to the prior facility, indicating consistent financial management.

Frequently Asked Questions

This 8-K filing announces that D.R. Horton, Inc. has entered into a new, larger, and longer-term revolving credit facility to replace an existing one that was nearing maturity. This is a significant event as it relates to the company's access to liquidity and its financial flexibility.

The new credit facility provides D.R. Horton with the ability to borrow up to $775 million. This amount is subject to certain limitations based on inventory levels and other senior unsecured indebtedness. Additionally, the facility's capacity is anticipated to grow by $20 million once the acquisition of Schuler Homes, Inc. is completed.

The new credit facility has a four-year term and is unsecured. Interest rates on outstanding borrowings will fluctuate based on LIBOR, with an initial rate set at 1.625% above LIBOR. The facility also contains operating and financial covenants that are largely consistent with the company's previous credit agreement.

The new credit facility provides D.R. Horton with enhanced financial flexibility and liquidity for a longer period. By securing this larger facility before the expiration of the old one, the company demonstrates strong access to credit markets and proactive financial management, which can support continued operations, growth initiatives, and investor confidence.