8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Jul 7, 2006)

Filed July 7, 2006For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) has filed an 8-K report detailing a material definitive agreement related to its financing operations. Effective June 30, 2006, the company's subsidiary, CH Funding, LLC, entered into a Second Amended and Restated Loan Agreement, also known as the Commercial Paper Conduit Facility (CP Conduit Facility), with DHI Mortgage Company, Ltd. This agreement is crucial for funding residential mortgage loans originated by DHI Mortgage.

Key Highlights

  • 1DHI's subsidiary CH Funding, LLC entered into a Second Amended and Restated Loan Agreement for its CP Conduit Facility on June 30, 2006.
  • 2The agreement's purpose is to fund residential first-lien or second-lien mortgage loans originated by DHI Mortgage Company, Ltd.
  • 3The maximum capacity of the CP Conduit Facility has been increased from $650 million to $1.2 billion.
  • 4The term of the facility is three years from June 30, 2006, subject to annual renewal of a 364-day backup liquidity feature.
  • 5The interest rate on the facility was 5.61% per annum as of June 30, 2006.
  • 6The CP Conduit Facility is not guaranteed by D.R. Horton, Inc. or its homebuilding debt guarantors.
  • 7The agreement amends and restates a prior loan agreement dated July 9, 2002.

Frequently Asked Questions

The main purpose of this agreement is to provide a funding mechanism for residential first-lien and second-lien mortgage loans originated by DHI Mortgage Company, Ltd. CH Funding, LLC will purchase these mortgage loans from DHI Mortgage and use them as collateral to issue commercial paper, thereby securing necessary funds.

The facility has been amended and restated to modify certain pricing and operative terms and documents. Most significantly, its maximum capacity has been increased from $650 million to $1.2 billion, providing DHI with greater access to funding.

The facility has a term of three years from June 30, 2006, with an annual renewal option for a 364-day backup liquidity feature. As of June 30, 2006, the interest rate on the facility was 5.61% per annum.

No, the filing explicitly states that the CP Conduit Facility is not guaranteed by D.R. Horton, Inc. or any of the guarantors of its homebuilding debt. This means the obligation is contained within the subsidiary structure.