Dream Finders Homes Inc.
09/05/2025 | Press release | Distributed by Public on 09/05/2025 14:14
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01. Entry into a Material Definitive Agreement.
On September 5, 2025, Dream Finders Homes, Inc. (the "Company") and certain of its subsidiaries (the "Guarantors") entered into an Indenture (the "Indenture") among the Company, the Guarantors and U.S. Bank Trust Company, National Association, as trustee, governing the terms of the Company's $300 million aggregate principal amount of 6.875% senior unsecured notes (the "2030 Notes").
Interest and Maturity
The 2030 Notes will mature on September 15, 2030, and interest is payable on the 2030 Notes semiannually in cash in arrears on each March 15 and September 15, and the first interest payment date for the 2030 Notes will be March 15, 2026. The 2030 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by each of the Guarantors.
Optional Redemption
At any time prior to September 15, 2027, the Company may redeem up to 40% in aggregate principal amount of the 2030 Notes at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption date, with an amount not greater than the net proceeds of certain equity offerings so long as the redemption occurs within 180 days of completing such equity offering and at least 60% of the aggregate principal amount of the 2030 Notes remains outstanding after such redemption.
In addition, at any time prior to September 15, 2027, the Company may redeem all or part of the 2030 Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest. On and after September 15, 2027, the Company may redeem all or a part of the 2030 Notes at redemption prices (expressed as percentages of principal amount) equal to (i) 103.438% for the twelve-month period beginning on September 15, 2027; (ii) 101.719% for the twelve-month period beginning on September 15, 2028; and (iii) 100.000% for the twelve-month period beginning on September 15, 2029, plus accrued and unpaid interest to the applicable redemption date.
Change of Control
Upon the occurrence of a Change of Control (as defined in the Indenture), the holders of the 2030 Notes will have the right to require the Company to repurchase all or a portion of the 2030 Notes at a price equal to 101% of the aggregate principal amount of the 2030 Notes, plus any accrued and unpaid interest to the date of purchase.
Certain Covenants
The Indenture restricts the Company's ability and the ability of certain of its subsidiaries to: (i) incur or guarantee additional debt or issue certain types of equity interests; (ii) pay dividends or distributions on, or redeem, repurchase or repurchase its capital stock; (iii) transfer or sell assets; (iv) make certain investments; (v) incur liens; (vi) enter into agreements that restrict dividends or other payments from its Restricted Subsidiaries (as defined in the Indenture) to the Company; (vii) consolidate, merge or transfer all or substantially all of its assets; (viii) enter into transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications. At any time when the 2030 Notes are rated investment grade by both Moody's Investors Service, Inc. and S&P Global Ratings, many of these covenants will terminate.
Events of Default
The Indenture provides that each of the following is an Event of Default:
•default for 30 days in the payment when due of interest on the 2030 Notes;
•default in the payment when due of the principal of, or premium, if any, on the 2030 Notes;
•failure by the Company to comply with its obligations to offer to purchase or purchase notes when required pursuant to the change of control or asset sale provisions of the Indenture or its failure to comply with the covenant relating to merger, consolidation or sale of assets;
•failure by the Company for 180 days after notice to comply with its reporting obligations under the Indenture;
•failure by the Company for 60 days after notice to comply with any of the other agreements in the Indenture;
•payment defaults with respect to other indebtedness of the Company and its subsidiaries and certain accelerations with respect to other indebtedness of the Company and its subsidiaries in the aggregate principal amount of $30.0 million or more;
•failure by the Company or any subsidiary to pay certain final judgments aggregating in excess of $30.0 million within 60 days;
•any subsidiary guarantee by a Guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker; and
•certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary (as defined in the Indenture).
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included, or incorporated by reference, in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03 of this Current Report.
Dream Finders Homes Inc. published this content on September 05, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on September 05, 2025 at 20:15 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]