D.R. Horton issues $700 million in senior notes due 2034
D.R. Horton, Inc., a leading homebuilding company, announced Today that it has finalized the sale of $700 million in senior unsecured notes with a 5% interest rate, maturing on October 15, 2034. The offering, completed today, resulted in net proceeds of approximately $688.5 million after underwriting discounts.
The notes, guaranteed by most of the company’s current homebuilding subsidiaries, will pay interest semi-annually starting April 15, 2025. They have been approved for listing on the New York Stock Exchange under the ticker NYSE:DHI.
According to the terms of the indenture, D.R. Horton has the option to redeem the notes at any time. If redemption occurs before July 15, 2034, the price will be either the greater of a calculated sum involving the Treasury Rate plus 20 basis points, or 100% of the principal amount. If redeemed on or after July 15, 2034, the redemption price will be 100% of the principal amount plus accrued interest.
In the event of a change of control coupled with a ratings downgrade, the company will be required to offer to repurchase the notes at 101% of their principal amount, plus accrued interest.
The notes are ranked equally with all existing and future unsecured indebtedness of the company that is not subordinated. The guarantees by the subsidiaries will also rank equally with their other unsecured indebtedness.
In other recent news, D.R. Horton, a leading home construction company, has demonstrated significant financial performance with its third fiscal quarter earnings per share (EPS) of $4.10, surpassing projections. This success is attributed to increased homebuilding gross margin and average selling price, alongside improved rental pre-tax income.
InvestingPro Insights
As D.R. Horton, Inc. (NYSE:DHI) positions itself for future growth through the sale of senior unsecured notes, analyzing the company’s financial metrics and market performance can provide investors with a clearer picture of its potential. According to InvestingPro data, D.R. Horton boasts a robust market capitalization of $56.88 billion, indicating its significant presence in the market. The company’s price-to-earnings (P/E) ratio stands at 11.64, suggesting that its stock is trading at a relatively reasonable valuation in relation to its earnings. Furthermore, D.R. Horton’s revenue growth over the last twelve months was 7.82%, showcasing the company’s ability to increase its sales figures year over year.
InvestingPro Tips highlight that D.R. Horton has raised its dividend for 10 consecutive years and maintained dividend payments for 11 consecutive years, reflecting a commitment to returning value to shareholders. Additionally, analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company’s financial prospects. These insights, coupled with the knowledge that D.R. Horton operates with a moderate level of debt and has liquid assets exceeding short-term obligations, can be particularly valuable for investors assessing the company’s financial health post-offering.
For those seeking more in-depth analysis, further InvestingPro Tips are available, including insights into the company’s stock price volatility and long-term returns. Visit the InvestingPro platform for additional tips on D.R. Horton and to explore a comprehensive suite of investment tools.
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