8-KMaterial AgreementsFinancial EventsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Mar 7, 2022)

Filed March 7, 2022For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) announced through its wholly-owned subsidiary, DRH Rental, Inc., the establishment of a new $625 million four-year senior unsecured revolving credit facility. This facility, maturing on March 4, 2026, is designed to support the company's multi-family and single-family rental operations. The credit facility includes an uncommitted accordion feature that allows for an expansion of up to $1.25 billion, providing significant flexibility for future growth and capital needs. Key terms of the facility involve DRH Rental's material wholly-owned subsidiaries acting as guarantors, though D.R. Horton itself and other subsidiaries guaranteeing homebuilding debt are excluded. The borrowing availability is contingent on a borrowing base calculation, and pricing is tied to DRH Rental's Leverage Ratio. The agreement also stipulates customary covenants and financial requirements, including maintaining a minimum tangible net worth, liquidity, and a maximum leverage ratio, ensuring financial discipline within the rental segment.

Key Highlights

  • 1DRH Rental, a subsidiary of D.R. Horton, secured a $625 million senior unsecured revolving credit facility.
  • 2The credit facility has a four-year term, maturing on March 4, 2026.
  • 3An uncommitted accordion feature allows for potential expansion of the facility to $1.25 billion.
  • 4The credit facility is intended to support D.R. Horton's multi-family and single-family rental operations.
  • 5Certain wholly-owned subsidiaries of DRH Rental will act as guarantors.
  • 6Borrowing availability is subject to a borrowing base calculation based on unrestricted cash and real estate assets.
  • 7Pricing is determined by DRH Rental's Leverage Ratio, and financial covenants include minimum tangible net worth and liquidity, and a maximum leverage ratio.

Frequently Asked Questions

The primary purpose of this $625 million credit facility is to support and finance the multi-family and single-family rental operations of D.R. Horton through its subsidiary, DRH Rental, Inc.

No, the credit facility is with DRH Rental, Inc., and amounts outstanding are not guaranteed by D.R. Horton, Inc. or its subsidiaries that guarantee homebuilding indebtedness. Guarantors are limited to DRH Rental's material wholly-owned subsidiaries.

The uncommitted $625 million accordion feature provides D.R. Horton with the flexibility to potentially increase the total credit facility size up to $1.25 billion. This allows the company to access additional capital if needed for future growth or strategic initiatives within its rental business, subject to certain conditions and securing additional bank commitments.

Yes, the Credit Facility includes customary financial covenants that require DRH Rental to maintain a minimum level of tangible net worth, a minimum level of liquidity, and a leverage ratio below a maximum level, as defined in the Credit Agreement. These covenants are designed to ensure the financial health and stability of the rental operations.