8-KMaterial AgreementsFinancial Events

HORTON D R INC /DE/ 8-K Report, Material Agreement (Dec 5, 2005)

Filed December 5, 2005For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) has filed an 8-K report detailing a material amendment to its credit facility. Specifically, DHI Mortgage Company, Ltd., a subsidiary, entered into the Seventh Amendment to its Amended and Restated Credit Agreement. This amendment extends the temporary availability of a higher borrowing capacity, keeping it at $450 million from December 1, 2005, through January 15, 2006, instead of the previously scheduled reduction to $300 million on December 1, 2005. This extension provides DHI Mortgage with increased liquidity for an additional 46 days, which can be crucial for managing operations and short-term financing needs, especially in the homebuilding sector. It's important for investors to note that the credit facility is secured by mortgage loans held for sale and is not guaranteed by the parent company, D.R. Horton, Inc., or its note guarantors. Interest rates are tied to the LIBOR rate plus an applicable margin.

Key Highlights

  • 1DHI Mortgage Company, Ltd. (a subsidiary) entered into a Seventh Amendment to its Credit Facility.
  • 2The amendment extends the temporary borrowing capacity of $450 million through January 15, 2006.
  • 3Originally, this capacity was set to decrease to $300 million on December 1, 2005.
  • 4The reduced capacity of $300 million will now commence on January 16, 2006 (subject to accordion feature).
  • 5The Credit Facility is secured by mortgage loans held for sale.
  • 6The facility is not guaranteed by the parent company, D.R. Horton, Inc., or its note guarantors.
  • 7Interest on the facility is based on LIBOR plus an applicable margin.

Frequently Asked Questions

The Seventh Amendment extends the temporary higher borrowing capacity of $450 million by 46 days, from December 1, 2005, to January 15, 2006. This provides the subsidiary, DHI Mortgage, with additional liquidity for a longer period than initially planned.

The amendment directly affects DHI Mortgage Company, Ltd., a subsidiary of D.R. Horton, Inc. The parent company, D.R. Horton, Inc., and its note guarantors do not provide guarantees for this specific credit facility.

The credit facility is secured by certain mortgage loans that DHI Mortgage holds for sale.

The borrowing limit will remain at $450 million until January 15, 2006. It is then scheduled to be reduced to $300 million starting January 16, 2006, although this is subject to the availability of a $150 million accordion feature.