8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Feb 23, 2021)

Filed February 23, 2021For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced through its subsidiary, DHI Mortgage Company, Ltd., the execution of a Third Amended and Restated Master Repurchase Agreement (the "Amended Repurchase Facility") effective February 19, 2021. This agreement, replacing a prior one from 2015, serves to enhance the liquidity and financing capabilities for DHI Mortgage by facilitating the transfer of eligible loans to buyers in exchange for funds. The primary focus for investors is the significant increase in the financing capacity under this facility. The Maximum Aggregate Commitment has been raised to $1.4 billion, with provisions for temporary increases up to $1.633 billion at fiscal quarter ends and a potential accordion feature allowing for up to $1.8 billion based on additional buyer commitments. This expansion indicates a strategic move to bolster DHI Mortgage's operational funding and potentially support increased loan origination or servicing activities.

Key Highlights

  • 1DHI Mortgage Company, Ltd. entered into a Third Amended and Restated Master Repurchase Agreement (Amended Repurchase Facility) effective February 19, 2021.
  • 2The new agreement replaces a previous Master Repurchase Agreement dated February 27, 2015.
  • 3The facility is designed to provide financing and liquidity to DHI Mortgage by facilitating the purchase of eligible loans against the transfer of funds.
  • 4The Maximum Aggregate Commitment under the Amended Repurchase Facility has been increased to $1.4 billion.
  • 5The facility includes an accordion feature allowing for a potential increase to $1.8 billion based on additional buyer commitments.
  • 6Temporary increases to $1.633 billion are permitted for specific periods around fiscal quarter ends.
  • 7Amounts outstanding under this facility are not guaranteed by D.R. Horton, Inc. or its homebuilding debt guarantors.

Frequently Asked Questions

The Amended Repurchase Facility is designed to provide DHI Mortgage Company, Ltd. with financing and liquidity. It achieves this by allowing DHI Mortgage to transfer eligible loans to buyers in exchange for funds, essentially acting as a source of working capital for its mortgage operations.

The new agreement significantly increases the financing capacity. The Maximum Aggregate Commitment has been raised to $1.4 billion, compared to the previous agreement which likely had a lower limit. Furthermore, the facility includes provisions for temporary and potential increases up to $1.633 billion and $1.8 billion, respectively, offering substantial flexibility.

No, the filing explicitly states that amounts outstanding under the Amended Repurchase Facility are not guaranteed by D.R. Horton, Inc. or any of its subsidiaries that guarantee homebuilding debt. This means the financial responsibility for this facility rests with DHI Mortgage Company, Ltd.

The term of the Amended Repurchase Facility extends through the earlier of February 18, 2022, or the date when the buyers' commitments are terminated under specific conditions outlined in the agreement, such as by order of a governmental authority or by operation of law.