8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Sep 24, 2009)

Filed September 24, 2009For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced a significant amendment to its Master Repurchase Agreement through its subsidiary, DHI Mortgage Company, Ltd. This Second Amendment, effective September 23, 2009, substantially increases the financing capacity available to DHI Mortgage. The repurchase facility, managed by U.S. Bank National Association, is crucial for providing liquidity by facilitating the purchase of eligible loans. This amendment enhances DHI's ability to manage its loan portfolio and secure necessary funding. For investors, the key takeaway is the increased credit line, which suggests a more robust liquidity position for DHI Mortgage during a potentially challenging economic period. The facility's maximum commitment has been raised from $75 million to $100 million, with a temporary increase to $125 million during specific fiscal periods. While the parent company, D.R. Horton, Inc., does not guarantee these obligations, the expanded facility indicates continued operational support and confidence in DHI Mortgage's business model.

Key Highlights

  • 1DHI Mortgage Company, Ltd. entered into a Second Amendment to its Master Repurchase Agreement with U.S. Bank National Association.
  • 2The amendment effectively increases the maximum aggregate commitment of the repurchase facility from $75 million to $100 million.
  • 3A further temporary increase to $125 million is available during the last five business days of any fiscal quarter and the first seven business days of the following fiscal quarter.
  • 4The repurchase facility is designed to provide financing and liquidity to DHI Mortgage by facilitating purchase transactions of eligible loans.
  • 5Advances under the agreement are priced based on the Libor Rate plus an Applicable Margin, which varies with the amount outstanding (2.5% up to $100 million, 3.0% above $100 million).
  • 6The facility includes a Libor Rate Floor of 2.0%.
  • 7The term of the repurchase facility remains unchanged, expiring on March 4, 2010, or earlier if commitments are terminated.
  • 8D.R. Horton, Inc. and its homebuilding debt subsidiaries do not guarantee the amounts outstanding under this repurchase facility.

Frequently Asked Questions

The primary purpose of the Second Amendment to the Master Repurchase Agreement is to increase the financing and liquidity available to DHI Mortgage Company, Ltd. This is achieved by raising the maximum aggregate commitment of the repurchase facility, allowing DHI Mortgage to purchase more eligible loans.

The maximum aggregate commitment has been increased from $75 million to $100 million. Additionally, there is a temporary increase to $125 million during the last five business days of any fiscal quarter and the first seven business days of the subsequent fiscal quarter.

No, D.R. Horton, Inc. and its subsidiaries that guarantee homebuilding debt do not provide any guarantee for the amounts outstanding under this repurchase facility. This means the financial obligation rests solely with DHI Mortgage Company, Ltd.

The term of the repurchase facility remains unchanged and is set to expire on March 4, 2010, or on an earlier date if the buyers' commitments are terminated by order of a governmental authority or by operation of law.