8-KMaterial AgreementsFinancial Events

HORTON D R INC /DE/ 8-K Report, Material Agreement (Sep 26, 2005)

Filed September 26, 2005For Securities:DHI

Summary

This 8-K filing by D.R. Horton, Inc. (DHI) on September 26, 2005, primarily details material definitive agreements entered into by its subsidiaries, DHI Mortgage Company, Ltd. and CH Funding LLC. These agreements involve amendments to existing credit facilities designed to temporarily increase borrowing capacity. Specifically, DHI Mortgage Company, Ltd. amended its Credit Facility to temporarily raise its capacity from $450 million to $600 million through October 26, 2005, after which it reverts. Similarly, CH Funding LLC amended its Master Repurchase Agreement (CP Facility) to temporarily increase its capacity from $500 million to $600 million through November 10, 2005, before returning to $500 million. These increases are intended to provide additional liquidity, likely for operational needs such as funding mortgage loans held for sale.

Key Highlights

  • 1DHI Mortgage Company, Ltd. (a subsidiary) entered into a fourth amendment to its Credit Facility.
  • 2The Credit Facility's capacity was temporarily increased from $450 million to $600 million until October 26, 2005.
  • 3CH Funding LLC (a subsidiary) entered into an eighth omnibus amendment to its Master Repurchase Agreement (CP Facility).
  • 4The CP Facility's capacity was temporarily increased from $500 million to $600 million until November 10, 2005.
  • 5These temporary capacity increases are intended to provide additional liquidity for funding mortgage loans held for sale.
  • 6The credit facilities are secured by mortgage loans held for sale and are not guaranteed by D.R. Horton, Inc.
  • 7The filing incorporates these agreements into Item 2.03 concerning financial obligations.

Frequently Asked Questions

The primary purpose of these amendments is to temporarily increase the borrowing capacity of DHI Mortgage Company, Ltd.'s Credit Facility and CH Funding LLC's CP Facility. This provides the subsidiaries with additional liquidity, likely to fund operations, specifically mortgage loans held for sale.

DHI Mortgage's Credit Facility capacity was temporarily increased from $450 million to $600 million until October 26, 2005. CH Funding's CP Facility capacity was temporarily increased from $500 million to $600 million until November 10, 2005. After these periods, the capacities revert to their previous levels unless accordion features are exercised.

No, the filing explicitly states that the Credit Facility and the CP Facility are not guaranteed by D.R. Horton, Inc. or any of the guarantors of D.R. Horton's Senior and Senior Subordinated Notes. The obligations are secured by specific mortgage loans held for sale.

Both the Credit Facility and the CP Facility are secured by certain mortgage loans held for sale by the respective subsidiaries. For the CP Facility, these mortgage loans serve as collateral for asset-backed commercial paper issued in the market.