8-KMaterial AgreementsFinancial Events

HORTON D R INC /DE/ 8-K Report, Material Agreement (Jun 29, 2005)

Filed June 29, 2005For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) filed an 8-K on June 29, 2005, reporting significant updates to its credit facilities through its subsidiaries. The most impactful information for investors relates to DHI Mortgage Company, Ltd. increasing its credit capacity by $150 million through the exercise of an accordion feature, bringing its total credit facility to $450 million. This increase is expected to remain in place through October 2005 and is secured by mortgage loans held for sale, not guaranteed by the parent company. Additionally, CH Funding LLC, another subsidiary, amended its Master Repurchase Agreement (CP Facility), boosting its capacity from $300 million to $500 million. This facility is also secured by mortgage loans held for sale, which are used as collateral for asset-backed commercial paper. These expansions in credit lines indicate a strategic move by D.R. Horton to ensure sufficient liquidity and financial flexibility, likely to support its ongoing operations and growth in the housing market.

Key Highlights

  • 1DHI Mortgage Company, Ltd. increased its credit facility capacity by $150 million to a total of $450 million by exercising an accordion feature.
  • 2The increased credit capacity for DHI Mortgage is expected to be in place through October 2005.
  • 3The DHI Mortgage credit facility is secured by mortgage loans held for sale and is not guaranteed by D.R. Horton, Inc. or its note guarantors.
  • 4CH Funding LLC increased the capacity under its Master Repurchase Agreement (CP Facility) from $300 million to $500 million.
  • 5The CP Facility is secured by mortgage loans held for sale, which are used as collateral for asset-backed commercial paper.
  • 6The CP Facility is not guaranteed by D.R. Horton, Inc. or its note guarantors.
  • 7The filing primarily relates to material definitive agreements and the creation of financial obligations for DHI's subsidiaries.

Frequently Asked Questions

The primary purpose of these amendments is to increase the borrowing capacity available to D.R. Horton's subsidiaries, DHI Mortgage Company, Ltd. and CH Funding LLC, thereby providing them with greater financial flexibility and liquidity to support their operations and growth.

No, neither the increased credit facility for DHI Mortgage nor the expanded CP Facility for CH Funding are guaranteed by D.R. Horton, Inc. or any of the guarantors of D.R. Horton's Senior and Senior Subordinated Notes. The obligations are solely those of the respective subsidiaries.

Both the DHI Mortgage credit facility and the CH Funding CP Facility are secured by certain mortgage loans held for sale. For the CP Facility, these pledged mortgage loans serve as collateral for asset-backed commercial paper issued in the commercial paper market.

DHI Mortgage expects the additional $150 million from the exercised accordion feature to remain in place through October 2005.