8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Feb 18, 2022)

Filed February 18, 2022For Securities:DHI

Summary

On February 18, 2022, D.R. Horton, Inc. (DHI) announced that its subsidiary, DHI Mortgage Company, Ltd., entered into a Fourth Amended and Restated Master Repurchase Agreement (the "Amended Repurchase Facility"). This agreement is a crucial financing tool that provides liquidity to DHI Mortgage by enabling purchase transactions where eligible loans are transferred to buyers in exchange for funds. The facility replaces a prior agreement and signifies an expansion of DHI's financing capacity. The key takeaway for investors is the significant increase in the financing capacity of the repurchase facility. The Maximum Aggregate Commitment has been raised to $1.6 billion, with the potential to increase further to between $1.8 billion and $2.2 billion during high-volume periods. Furthermore, an "accordion feature" allows for an even higher commitment of up to $2.3 billion, contingent on securing additional funds from existing or new buyers. Importantly, these obligations are not guaranteed by the parent company, D.R. Horton, Inc., or its homebuilding debt guarantors, which limits direct recourse to the parent entity.

Key Highlights

  • 1DHI Mortgage Company, Ltd. entered into a Fourth Amended and Restated Master Repurchase Agreement (Amended Repurchase Facility) effective February 18, 2022.
  • 2The Amended Repurchase Facility is designed to provide financing and liquidity to DHI Mortgage by facilitating loan purchase transactions.
  • 3The Maximum Aggregate Commitment under the facility has been increased to $1.6 billion.
  • 4Scheduled increases will raise the commitment to a range of $1.8 billion to $2.2 billion during high-volume periods, primarily at fiscal quarter-ends.
  • 5An accordion feature allows for a potential Maximum Aggregate Commitment of up to $2.3 billion by adding more buyers or commitments.
  • 6Amounts outstanding under the Amended Repurchase Facility are not guaranteed by D.R. Horton, Inc. or its homebuilding debt guarantors.
  • 7The term of the facility extends through February 17, 2023, unless terminated earlier.

Frequently Asked Questions

The Amended Repurchase Facility is a financing agreement that provides DHI Mortgage Company, Ltd. with liquidity by allowing it to transfer eligible loans to buyers in exchange for funds. It's a mechanism to access capital for its operations.

The financing capacity has significantly increased. The base Maximum Aggregate Commitment is now $1.6 billion, with potential to reach $1.8 billion to $2.2 billion during peak periods and up to $2.3 billion through an accordion feature.

No, 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 parent company is not directly liable for these obligations.

The term of the Amended Repurchase Facility extends through February 17, 2023, unless terminated earlier under specific conditions outlined in the agreement.