Summary
D.R. Horton, Inc. (DHI) announced via an 8-K filing on February 22, 2019, a significant amendment to its master repurchase agreement through its subsidiary, DHI Mortgage Company, Ltd. This Sixth Amendment to the Second Amended and Restated Master Repurchase Agreement, entered into with U.S. Bank National Association and other buyers, primarily extends the maturity date of the facility by 364 days to February 21, 2020. This extension is a positive development for investors as it secures a key financing and liquidity source for DHI Mortgage for an additional year.
Key Highlights
- 1DHI Mortgage Company, Ltd. entered into the Sixth Amendment to its Master Repurchase Agreement on February 22, 2019.
- 2The amendment extends the maturity date of the repurchase facility by 364 days, to February 21, 2020.
- 3The repurchase facility is a crucial source of financing and liquidity for DHI Mortgage, facilitating the transfer of eligible loans.
- 4The Sixth Amendment also includes a benefit of lower pricing for the facility.
- 5U.S. Bank National Association is acting as the buyer, administrative agent, sole book runner, and lead arranger.
- 6This amendment ensures continued access to funding for DHI Mortgage's operations over the next year.
Frequently Asked Questions
The primary purpose of the Sixth Amendment is to extend the maturity date of the Amended Repurchase Facility by 364 days, effectively securing financing and liquidity for DHI Mortgage until February 21, 2020. A secondary benefit is a reduction in the pricing associated with this facility.
The parties involved are DHI Mortgage Company, Ltd. (the Seller and a subsidiary of D.R. Horton, Inc.), U.S. Bank National Association (acting as Buyer, Administrative Agent, Sole Book Runner, and Lead Arranger), and other Buyers listed in the agreement.
The repurchase facility facilitates purchase transactions where DHI Mortgage transfers eligible loans to the Buyers in exchange for funds. This mechanism provides DHI Mortgage with the necessary financing and liquidity to conduct its business operations.
The new maturity date for the Amended Repurchase Facility, as extended by the Sixth Amendment, is February 21, 2020, or an earlier date if the Buyers' commitments are terminated under specific conditions outlined in the agreement.