8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Feb 26, 2020)

Filed February 26, 2020For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced an amendment to its master repurchase agreement through its subsidiary, DHI Mortgage Company, Ltd. This Ninth Amendment to the Second Amended and Restated Master Repurchase Agreement, effective February 21, 2020, primarily focuses on enhancing the company's liquidity and financing capabilities. The amendment increases the maximum aggregate commitment amount for DHI Mortgage's repurchase facility, providing greater access to funds for its operations. Key changes include a substantial increase in the facility's capacity, with provisions for temporary increases during peak fiscal quarters, and an enhanced accordion feature allowing for further expansion of borrowing limits. Additionally, the amendment adjusts the facility's term and reduces the LIBOR margin, which is expected to lower financing costs. These adjustments are designed to support DHI Mortgage's business activities by ensuring adequate funding for loan purchases.

Key Highlights

  • 1DHI Mortgage Company, Ltd., a DHI subsidiary, entered into the Ninth Amendment to its Master Repurchase Agreement on February 21, 2020.
  • 2The amendment increases the maximum aggregate commitment amount of the repurchase facility to $1.2 billion.
  • 3A temporary increase to $1.4 billion is available for approximately 30-45 days at the end of each fiscal quarter.
  • 4The accordion feature under the facility was increased, allowing for a potential maximum aggregate commitment of $1.5 billion.
  • 5The Ninth Amendment extends the facility's term to February 19, 2021, or until termination provisions are met.
  • 6The LIBOR Margin has been reduced, potentially lowering financing costs for DHI Mortgage.
  • 7Amounts outstanding under this facility are not guaranteed by D.R. Horton, Inc. or its homebuilding debt guarantors.

Frequently Asked Questions

The main purpose of the Ninth Amendment is to enhance DHI Mortgage's financing and liquidity by increasing the maximum aggregate commitment amount of its repurchase facility, extending its term, and reducing financing costs through a lower LIBOR margin.

The increased commitment amount of $1.2 billion (with potential temporary increases to $1.4 billion and a possible expansion to $1.5 billion) provides DHI Mortgage with greater access to capital, which is crucial for its operations, particularly in facilitating purchase transactions for eligible loans.

No, the amounts outstanding under the Amended Repurchase Facility are not guaranteed by D.R. Horton, Inc. or any of its subsidiaries that guarantee homebuilding debt.

The term of the Amended Repurchase Facility has been extended through the earlier of February 19, 2021, or the date when the Buyers’ commitments are terminated for other reasons outlined in the agreement.