D.R. Horton, Inc. Announces Pricing of $700 Million of 5.500% Senior Notes Due 2035

Rhea-AI Summary

D.R. Horton (NYSE:DHI) has announced the pricing of a $700 million registered public offering of senior notes due 2035. The notes will carry a 5.500% interest rate, payable semi-annually, with maturity set for October 15, 2035. The offering is expected to close on February 26, 2025, subject to customary conditions.

The company plans to use the net proceeds for general corporate purposes. Several major financial institutions are acting as Joint Book-Running Managers, including Mizuho Securities USA , J.P. Morgan Securities , and TD Securities (USA) , among others.

Positive

• Successful pricing of $700 million senior notes offering, strengthening capital structure
• Multiple top-tier financial institutions participating as Joint Book-Running Managers

Negative

• 5.500% interest rate represents a significant long-term debt servicing cost
• Additional debt burden could impact financial flexibility

Insights

Fixed Income Analyst

D.R. Horton's $700 million senior notes offering reveals several strategic implications for America's largest homebuilder. The 5.500% interest rate, while reflecting current market conditions, positions the company's cost of capital competitively within the homebuilding sector. The 2035 maturity provides extended financial flexibility and suggests management's confidence in long-term market stability.

The timing of this debt issuance is particularly noteworthy given the current housing market dynamics. With mortgage rates remaining elevated, this fixed-rate debt offering helps DHI lock in relatively favorable long-term financing. The broad syndicate of eight major financial institutions underwriting the offering indicates strong institutional confidence in DHI's credit quality and market position.

While the 'general corporate purposes' designation for proceeds use maintains maximum flexibility, this capital raise likely serves multiple strategic objectives:

• Refinancing of existing debt to optimize the maturity profile
• Building war chest for land acquisition opportunities in a potentially softening market
• Supporting working capital needs for construction pipeline
• Maintaining liquidity buffer amid market uncertainties

The successful pricing of this offering strengthens DHI's balance sheet position and demonstrates continued access to capital markets, important for a cyclical business like homebuilding. The extended maturity to 2035 also suggests management is positioning for multiple housing market cycles, providing a stable long-term capital structure.

ARLINGTON, Texas--(BUSINESS WIRE)-- D.R. Horton, Inc. (“D.R. Horton” or the “Company”) (NYSE:DHI), America’s Builder, announced that it has priced a registered underwritten public offering of $700 million aggregate principal amount of 5.500% senior notes due 2035. The senior notes will pay interest semi-annually at a rate of 5.500% per year and will mature on October 15, 2035. The closing of the offering is expected to occur on February 26, 2025, subject to the satisfaction of customary closing conditions. D.R. Horton intends to use the net proceeds of the offering for general corporate purposes.

Mizuho Securities USA LLC, J.P. Morgan Securities LLC, TD Securities (USA) LLC, BofA Securities, Inc., U.S. Bancorp Investments, Inc., Wells Fargo Securities, LLC, PNC Capital Markets LLC and Truist Securities, Inc. are acting as Joint Book-Running Managers in the transaction.

The Company has filed a registration statement (including a prospectus and a related prospectus supplement) with the United States Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents D.R. Horton has filed with the SEC for more complete information about the Company and this offering. You may get these documents free of charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, copies of the prospectus supplement and accompanying prospectus may be obtained by contacting Mizuho Securities USA LLC at 866-271-7403 or at the following address: 1271 Avenue of the Americas, New York, New York 10020, Attention: Debt Capital Markets; J.P. Morgan Securities LLC at the following address: 383 Madison Avenue, New York, New York 10179, Attention: Investment Grade Syndicate Desk; or TD Securities (USA) LLC at the following address: 1 Vanderbilt Ave, 11th Floor, New York, New York 10017, Attention: DCM-Transaction Advisory.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these senior notes, nor shall there be any offer, solicitation or sale of these senior notes in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The senior notes offering is being made only by means of the prospectus supplement and accompanying prospectus.

Forward-Looking Statements

Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that the closing of the offering is expected to occur on February 26, 2025, subject to the satisfaction of customary closing conditions, and that D.R. Horton intends to use the net proceeds for general corporate purposes.

Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the cyclical nature of the homebuilding, rental and lot development industries and changes in economic, real estate or other conditions; adverse developments affecting the capital markets and financial institutions, which could limit our ability to access capital, increase our cost of capital and impact our liquidity and capital resources; reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land, lot and rental inventory; our ability to effect our growth strategies, acquisitions, investments or other strategic initiatives successfully; the impact of an inflationary, deflationary or higher interest rate environment; risks of acquiring land, building materials and skilled labor and challenges obtaining regulatory approvals; the effects of public health issues such as a major epidemic or pandemic on the economy and our businesses; the effects of weather conditions and natural disasters on our business and financial results; home warranty and construction defect claims; the effects of health and safety incidents; reductions in the availability of performance bonds; increases in the costs of owning a home; the effects of information technology failures, data security breaches, and the failure to satisfy privacy and data protection laws and regulations; the effects of governmental regulations and environmental matters on our land development and housing operations; the effects of governmental regulations on our financial services operations; the effects of competitive conditions within the industries in which we operate; our ability to manage and service our debt and comply with related debt covenants, restrictions and limitations; the effects of negative publicity; the effects of the loss of key personnel; and the effects of actions by activist stockholders. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton’s annual report on Form 10-K and our subsequent quarterly report on Form 10-Q, both of which are filed with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219276990/en/

D.R. Horton, Inc.

Jessica Hansen, 817-390-8200

Senior Vice President - Communications

InvestorRelations@drhorton.com

Source: D.R. Horton, Inc.

FAQ

What is the interest rate and maturity date for DHI's new senior notes offering?

The senior notes carry a 5.500% interest rate, payable semi-annually, and will mature on October 15, 2035.

How much is D.R. Horton's (DHI) new senior notes offering worth?

D.R. Horton's senior notes offering is worth $700 million in aggregate principal amount.

When is the expected closing date for DHI's senior notes offering?

The offering is expected to close on February 26, 2025, subject to customary closing conditions.

How will DHI use the proceeds from the senior notes offering?

D.R. Horton intends to use the net proceeds from the offering for general corporate purposes.

Which investment banks are managing DHI's senior notes offering?

The offering is managed by several Joint Book-Running Managers including Mizuho Securities USA , J.P. Morgan Securities , TD Securities (USA) , BofA Securities, and others.