DENVER, July 15,
2024 /PRNewswire/ -- M.D.C. Holdings, Inc.
("MDC") announced today that it has commenced a consent
solicitation with respect to certain proposed amendments to each
Series of Notes (each as defined below) (the "Consent
Solicitation") of each registered holder of MDC's (i) 3.850%
Senior Notes due 2030 (CUSIP No. 552676AT5) (the "2030
Notes"), (ii) 2.500% Senior Notes due 2031 (CUSIP No.
552676AU2) (the "2031 Notes"), (iii) 6.000% Senior Notes due
2043 (CUSIP No. 552676AQ1) (the "2043 Notes") and (iv)
3.966% Senior Notes due 2061 (CUSIP No. 552676AV0) (the "2061
Notes" and, together with the 2030 Notes, the 2031 Notes, and
the 2043 Notes, the "Notes" and, each series of the Notes, a
"Series") issued under that indenture, dated as of
December 3, 2002 (the "Base
Indenture"), among MDC and U.S. Bank Trust Company, National
Association (as successor to U.S. Bank National Association) as
trustee (the "Trustee"), as supplemented by (i) that
supplemental indenture, dated as of January
9, 2020, with respect to the 2030 Notes, (ii) that
supplemental indenture dated as of January
11, 2021, with respect to the 2031 Notes, (iii) that
supplemental indenture, dated as of January
10, 2013, with respect to the 2043 Notes, and (iv) that
supplemental indenture, dated as of August
6, 2021, with respect to the 2061 Notes (each of the
foregoing, a "Supplemental Indenture" and the Base Indenture
as so supplemented by each Supplemental Indenture, the
"Indenture" of such Series).
Consent Solicitation
Upon the terms and subject to the conditions described in the
Solicitation Materials (as defined below), MDC is soliciting
consents from holders to amend Section 4.03 of each Supplemental
Indenture applicable to each series of Notes (the "Proposed
Amendments") to confirm MDC's interpretation of the Indenture
relating to each Series of Notes that, following the consummation
of the Merger (as defined below) with Sekisui House, Ltd. and the
resulting delisting of its common stock and the 2043 Notes from the
New York Stock Exchange, it is permitted to report certain
financial and related information to holders privately. In
addition, as part of the Proposed Amendments, MDC will agree to
make such information available on a private website and to hold
quarterly calls with management.
MDC is offering cash payments in the amount of $2.50 per $1,000
notional value of Notes to each holder who validly delivers
and does not validly revoke its consent to the Proposed Amendments
in the manner described in the Solicitation Materials on or prior
to the Expiration Time (as defined below) (the "Aggregate
Consent Payment" and, collectively the "Aggregate Consent
Payments") for the benefit of the applicable holders, subject
to satisfaction or waiver of certain conditions, including the
receipt of valid consents, with respect to any Series, of a
majority in aggregate principal amount of each such Series (the
"Requisite Consent"). If the Requisite Consents are obtained
for a particular Series, each Supplemental Indenture amendment will
become effective, and the Aggregate Consent Payments will be paid
for each Series of Notes for which such Requisite Consents have
been obtained and nonconsenting holders will be bound by the New
Supplemental Indentures but will not be entitled to receive any of
the applicable Aggregate Consent Payment.
MDC anticipates that, promptly after receipt of the Requisite
Consents of each Series at or prior to the Expiration Time (such
time, the "Effective Time"), MDC will give notice to the
Trustee that the Requisite Consents of such Series have been
obtained and MDC and the Trustee will execute a supplemental
indenture (a "New Supplemental Indenture") to the Indenture
to give effect to the Proposed Amendments. If the New Supplemental
Indentures are entered into, then the New Supplemental Indentures
will become effective as of the Effective Time and will thereafter
bind all holders of the Notes of the applicable Series, including
those that did not deliver timely and valid consents. If
consents relating to any Notes either are not validly delivered or
are subsequently validly revoked and not properly redelivered at or
prior to the Expiration Time, holders of such Notes will not
receive any of the applicable Aggregate Consent Payment even if the
Proposed Amendment will become effective with respect to such
Series.
The Consent Solicitation will expire at 5:00 p.m., New York
City time, on July 29, 2024
(unless earlier extended or terminated by MDC in its sole
discretion) (the "Expiration Time"). Payment of the
Aggregate Consent Payments with respect to each Series will be made
promptly after the Expiration Time. MDC, in its sole discretion,
may terminate the consent solicitation with respect to one or more
Series without the obligation to make any cash payments at any time
prior to the Effective Time, whether or not the Requisite Consents
have been received with respect to any Series. Except for the
Proposed Amendments, all of the existing terms of the Notes and the
Indenture will remain unchanged.
This press release does not set forth all of the terms and
conditions of the consent solicitation. Holders of the Notes should
carefully read MDC's Consent Solicitation Statement, dated
July 15, 2024, and the accompanying
materials (collectively, the "Solicitation Materials"), for
a complete description of all terms and conditions before making
any decision with respect to the Consent Solicitation. MDC does not
make any recommendation as to whether or not any holder should
consent to the Proposed Amendments. Additional information
concerning the terms and conditions of the Consent Solicitation and
the procedure for delivering consents, may be obtained from the
solicitation agent, Moelis & Company LLC, at (212) 271-0094.
Copies of the Solicitation Materials may be obtained from the
information agent, D.F. King & Co., Inc., by calling (800)
791-3320 or (212) 269-5550 for banks and brokers or by
email at MDC@dfking.com.
This announcement is for information purposes only and is
neither an offer to sell nor a solicitation of an offer to buy any
Series of Notes or any other securities. This announcement is also
not a solicitation of consents with respect to the Proposed
Amendments or any securities. The solicitation of consents by MDC
is being made only pursuant to the Solicitation Materials. The
Consent Solicitation is not being made in any jurisdiction in
which, or to or from any person to or from whom, it is unlawful to
make such solicitation under applicable state or foreign securities
or "blue sky" laws.
About M.D.C Holdings, Inc.
M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding
subsidiaries, which operate under the name Richmond American Homes,
have helped more than 240,000 homebuyers achieve the American Dream
since 1977. One of the largest homebuilders in the nation, MDC is
committed to quality and value that is reflected in each home its
subsidiaries build. The Richmond American companies have operations
in Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New
Mexico, Oregon,
Pennsylvania, Tennessee, Texas, Utah,
Virginia and Washington. Mortgage lending, insurance and
title services are offered by the following MDC subsidiaries,
respectively: HomeAmerican Mortgage Corporation, American Home
Insurance Agency, Inc. and American Home Title and Escrow
Company.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain forward-looking statements
concerning MDC. All statements other than statements of fact,
including information concerning future results, are
forward-looking statements. These forward-looking statements are
generally identified by the words "may," "could," "should,"
"estimate," "project," "forecast," "intend," "expect,"
"anticipate," "believe," "target," "plan" or other comparable
words, or by discussions of strategy that may involve risks and
uncertainties. These statements reflect MDC management's judgments
based on currently available information and involve a number of
risks and uncertainties. Although MDC management has chosen
such assumptions in good faith and believes that such assumptions
are reasonable, MDC cannot assure holders that such assumptions
will not deviate from actual results, and any such deviations could
be material. Future performance cannot be assured. Actual
results may differ materially from those in the forward-looking
statements. Some factors that could cause actual results to differ
include potential changes to the business, or to customer, employee
and other stakeholder relationships, resulting from the completion
of the merger pursuant to that Agreement and Plan of Merger by and
among SH Residential Holdings, LLC, a Delaware limited liability company
("Parent"), Clear Line, Inc., a Delaware corporation and indirect wholly owned
subsidiary of Parent ("Merger Sub"), Sekisui House, Ltd., a
Japanese kabushiki kaisha, and MDC, pursuant to which, on
April 19, 2024, Merger Sub merged
with and into MDC (the "Merger") and the risk that the
businesses may not be integrated successfully following the Merger;
public health issues such as a pandemic or epidemic could harm
business and results of operations of MDC; changes in general
economic, real estate and other business conditions may have an
adverse effect on the homebuilding and mortgage industries, which
could have a negative impact on MDC's business; increased
competition levels in the homebuilding and mortgage lending
industries could have a negative impact on MDC's homebuilding and
mortgage operations; if land is not available at reasonable prices
or terms, MDC could be required to scale back its operations in a
given market and/or MDC may operate at lower levels of
profitability; supply shortages and other risks related to the
demand for skilled labor and building materials could continue to
increase costs and delay deliveries; if mortgage interest rates
continue to rise, if down payment requirements are increased, if
loan limits are decreased, or if mortgage financing otherwise
becomes less available, it could adversely affect MDC's business;
changes to tax laws, incentives or credits currently available to
MDC's customers may negatively impact its business; a decline in
the market value of MDC's homes or carrying value of MDC's land
could continue to have a negative impact on its business; natural
disasters could cause an increase in home construction costs, as
well as delays, and could negatively impact MDC's business; changes
in energy prices or regulations may have an adverse effect on MDC's
cost of building homes; MDC's business is subject to numerous
federal, state and local laws and regulations concerning land
development, construction of homes, sales, mortgage lending,
environmental and other aspects of MDC's business. These laws and
regulations could give rise to additional liabilities or
expenditures, or restrictions on the business; in the ordinary
course of business, MDC is required to obtain surety bonds, the
unavailability of which could adversely affect its business;
product liability litigation and warranty claims that arise in the
ordinary course of business may be costly; repurchase requirements
associated with HomeAmerican's sale of mortgage loans, could
negatively impact MDC's business; because of the seasonal nature of
MDC's business, MDC's quarterly operating results can fluctuate;
MDC is dependent on the services of key employees, and the loss of
their services could hurt its business; information technology
failures and cybersecurity breaches could harm MDC's business;
financial industry turmoil could materially and adversely affect
MDC's liquidity and consolidated financial statements; and if the
Requisite Consents for one or more Notes are not received and MDC
nonetheless no longer file reports with the SEC, there is a risk
that one or more holders may challenge MDC's interpretation of the
Indenture that it is permitted to cease filing such reports with
the SEC. A detailed discussion of these and other risks and
uncertainties that could cause actual results and events to differ
materially from such forward-looking statements is included under
"Certain Significant Considerations" and in Part I, Item 1A "Risk
Factors" of MDC's Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, in Part II,
Item 1A "Risk Factors" of MDC's Quarterly Report on Form 10-Q for
the quarterly period ended March 31,
2024 and as may be included from time to time in the reports
filed with the SEC.
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SOURCE M.D.C. Holdings, Inc.