8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Sep 10, 2012)

Filed September 10, 2012For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced the execution of a five-year, $125 million senior unsecured revolving Credit Agreement, effective September 7, 2012. This facility, with The Royal Bank of Scotland plc as the Administrative Agent and initial lender, provides DHI with significant financial flexibility. The agreement includes an uncommitted accordion feature that could potentially increase the facility size to $500 million, subject to additional commitments, and allows for the issuance of letters of credit up to a sublimit of $62.5 million. This new credit line is crucial for DHI's operational and strategic needs, offering a substantial pool of capital for general corporate purposes, including working capital, capital expenditures, and potential acquisitions. The pricing of borrowings and commitments will be based on DHI's Leverage Ratio, aligning financing costs with the company's financial health. The agreement is secured by guarantees from DHI's wholly-owned subsidiaries and includes financial covenants requiring the maintenance of a minimum Tangible Net Worth and a maximum Leverage Ratio.

Key Highlights

  • 1D.R. Horton entered into a new five-year, $125 million senior unsecured revolving Credit Facility.
  • 2The facility is effective as of September 7, 2012, and matures on September 7, 2017.
  • 3The Royal Bank of Scotland plc is the Administrative Agent and initial lender for the facility.
  • 4The agreement includes an uncommitted accordion feature allowing potential expansion up to $500 million.
  • 5A sublimit of $62.5 million is available for the issuance of letters of credit.
  • 6Borrowing costs are tied to DHI's Leverage Ratio, with pricing based on a specific schedule.
  • 7The facility contains financial covenants related to Tangible Net Worth and Leverage Ratio, and is guaranteed by DHI's subsidiaries.

Frequently Asked Questions

The new Credit Agreement provides D.R. Horton with a $125 million revolving credit facility that can be used for general corporate purposes, including working capital, capital expenditures, and potential business development activities.

The initial committed amount is $125 million. However, there is an uncommitted accordion feature that allows D.R. Horton to increase the aggregate commitment amount up to $500 million, subject to securing additional bank commitments.

The Credit Agreement requires D.R. Horton to maintain a minimum Tangible Net Worth and a Leverage Ratio below a specified maximum level, as detailed in Article VII of the agreement.

The primary parties are D.R. Horton, Inc. as the borrower, and The Royal Bank of Scotland plc, serving as the Administrative Agent and initial lender.