Summary
D.R. Horton, Inc. (DHI) announced through its subsidiary, DHI Mortgage Company, Ltd., the entry into a Master Repurchase Agreement with Royal Bank of Canada (RBC) on April 4, 2023. This agreement establishes a Repurchase Facility that provides DHI Mortgage with an uncommitted borrowing capacity of up to $300 million. Under this facility, DHI Mortgage can sell eligible residential mortgage loans to RBC and later repurchase them, effectively using these loans as collateral for short-term financing. This new facility offers DHI Mortgage a flexible source of liquidity, which can be crucial in managing its mortgage origination and servicing operations. The terms include variable interest rates based on SOFR plus a pricing spread, and are subject to customary covenants and financial requirements for DHI Mortgage, such as maintaining minimum tangible net worth and liquidity. Importantly, D.R. Horton, Inc. itself and its other major subsidiaries do not guarantee these obligations, highlighting the facility's specific use within the mortgage segment.
Key Highlights
- 1DHI Mortgage Company, Ltd. entered into a Master Repurchase Agreement with Royal Bank of Canada (RBC) effective April 4, 2023.
- 2The agreement establishes a Repurchase Facility with an uncommitted borrowing capacity of up to $300 million.
- 3The facility allows DHI Mortgage to sell and later repurchase eligible residential mortgage loans from RBC.
- 4Interest rates are variable, based on SOFR plus an agreed-upon pricing spread.
- 5The facility includes customary covenants and financial requirements for DHI Mortgage, such as maintaining tangible net worth and liquidity.
- 6D.R. Horton, Inc. and its other subsidiaries are not guaranteeing the obligations under this Repurchase Facility.