Summary
D.R. Horton, Inc. (DHI) announced on June 12, 2006, its decision to voluntarily call for redemption all of its outstanding 10.5% Senior Subordinated Notes due 2011. This redemption is scheduled to occur on July 15, 2006. The company will pay $1,052.50 for every $1,000 in principal amount of these notes, resulting in a total redemption cost of approximately $152.4 million. In addition to the principal repayment, D.R. Horton will also pay accrued interest of $52.50 per $1,000 note, amounting to roughly $7.6 million, to noteholders of record as of July 1, 2006.
Key Highlights
- 1D.R. Horton is voluntarily calling all outstanding 10.5% Senior Subordinated Notes due 2011.
- 2The redemption date is set for July 15, 2006.
- 3The redemption price is $1,052.50 per $1,000 note, a premium over par value.
- 4The total aggregate redemption price for the principal is approximately $152.4 million.
- 5Accrued and unpaid interest of approximately $7.6 million will also be paid.
- 6Holders of record as of July 1, 2006, will receive the accrued interest.
- 7A press release detailing this redemption has been filed as an exhibit.
Frequently Asked Questions
While the filing does not explicitly state the reason, companies often redeem debt early to take advantage of lower interest rates, refinance at more favorable terms, or improve their capital structure.
Noteholders will receive the principal amount plus a premium, totaling $1,052.50 per $1,000 note. They will also receive accrued interest of $52.50 per $1,000 note for the period up to the redemption date.
The total cost is the sum of the aggregate redemption price for the principal, approximately $152.4 million, and the aggregate accrued interest, approximately $7.6 million, for a combined total of roughly $160 million.
Bondholders should expect to receive a Notice of Full Redemption by mail, which will outline the specific procedures for tendering their notes. They should ensure their contact information is up-to-date with their broker or the trustee.