Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 5, 2017, D.R. Horton, Inc.
(the Company) completed a public offering (the Offering) of $400 million aggregate principal amount of its 2.550% Senior Notes due 2020 (the Notes). The Company received net proceeds from the Offering, after
the underwriting discounts and commissions, of $398.3 million.
The Notes are governed by an Indenture (the Base
Indenture), dated as of May 1, 2012, between the Company and American Stock Transfer & Trust Company, LLC, as trustee (the Original Trustee), as supplemented by the Ninth Supplemental Indenture, dated as of
December 5, 2017 (the Ninth Supplemental Indenture), among the Company, the guarantors party thereto (the Guarantors), the Original Trustee, as original trustee, and Branch Bank and Trust Company, as series trustee.
Interest on the Notes will accrue at a rate of 2.550% per annum on the principal amount from December 5, 2017, payable semi-annually on June 1 and December 1 of each year, beginning on June 1, 2018. The Notes will mature on
December 1, 2020, subject to earlier redemption or repurchase. The Notes are guaranteed by substantially all of the Companys current homebuilding subsidiaries.
Optional Redemption
The Company may, at
its option, generally redeem all or portion of the Notes at any time at a redemption price of 100% of the principal amount on the Notes plus accrued and unpaid interest, if any, to the redemption date, plus a make whole premium.
Change of Control
Upon the occurrence of
certain events resulting in both a change of control of the Company and a ratings downgrade with respect to the Notes, subject to certain exceptions, the Company will be required to make an offer to each holder of the Notes to purchase all or any
part of such holders Notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest to the date of purchase.
Events
of Default
The Ninth Supplemental Indenture includes customary events of default, including payment defaults, failure to pay certain
other indebtedness and certain events of bankruptcy, insolvency or reorganization.
Ranking
The Notes are general unsecured obligations of the Company and rank senior in right of payment to any future indebtedness of the Company that
is, by its terms, expressly subordinated in right of payment to the Notes and equal in right of payment with all existing and future unsecured indebtedness of the Company that is not so subordinated. The guarantees will be general unsecured
obligations of the Guarantors and will rank senior in right of payment to any future indebtedness of the Guarantors that is, by its terms, expressly subordinated in right of payment to the guarantees and will rank equal in right of payment with all
existing and future unsecured indebtedness of the Guarantors that is not so subordinated.
The above description of the Notes and the
Ninth Supplemental Indenture is qualified in its entirety by reference to the full text of the Ninth Supplemental Indenture (including the form of Note included therein), a copy of which is filed as Exhibit 4.1 hereto and incorporated herein by
reference.