BEAZER HOMES USA, INC. (NYSE:BZH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On October10, 2017, Beazer Homes USA, Inc. (the “Company”) issued and sold $400million aggregate principal amount of its 5.875% Senior Notes due 2027 (the “Notes”) through a private placement to qualified institutional buyers to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to Regulation S under the Securities Act. The Notes were initially sold to a purchase agreement, dated September25, 2017, among the Company, the wholly-owned subsidiaries named as guarantors therein (the “Guarantors”) and Credit Suisse Securities (USA) LLC, as representative of the initial purchasers named therein (the “Initial Purchasers”). The proceeds from the offering were used, together with cash on hand, to fund the repayment of $225million of the Company’s 5.75% Senior Notes due 2019 (the “2019 Notes”) and $175million of its 7.25% Senior Notes due 2023 (the “2023 Notes”), including fees and expenses related to tender offers for the 2019 Notes and the 2023 Notes.
Interest on the Notes is payable semi-annually in cash in arrears on April15 and October15 of each year, commencing April15, 2018. The Notes will mature on October15, 2027.
The Notes were issued under an Indenture, dated October10, 2017 (the “Indenture”), among the Company, the Guarantors and U.S. Bank National Association, as trustee. The Indenture contains covenants which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness or issue certain preferred shares, create liens on assets to secure indebtedness, pay dividends or make other equity distributions, purchase or redeem capital stock, make certain investments and consolidate or merge. The Indenture contains customary events of default. Upon the occurrence of an event of default, payments on the Notes may be accelerated and become immediately due and payable.
Upon a change of control (as defined in the Indenture), the Indenture requires the Company to make an offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest.
The Company may redeem the Notes at any time prior to October15, 2022, in whole or in part, at a redemption price equal to 50% of the principal amount, plus a customary make-whole premium, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, at any time on or prior to October15, 2020, the Company may redeem up to 35% of the aggregate principal amount of Notes with the proceeds of certain equity offerings at a redemption price equal to 105.875% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption; provided, that at least 65% of the aggregate principal amount of the Notes originally issued under the Indenture remain outstanding after such redemption. Furthermore, at any time prior to the maturity of the Notes, if at least 90% of the principal amount of the Notes have previously been repurchased and cancelled in connection with a change of control offer (as defined in the Indenture) the Company may redeem all of the remaining Notes at a redemption price equal to 101% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date. On or after October15, 2025, the Company may redeem some or all of the Notes at 50% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The Notes rank equally in right of payment with all of the Company’s existing and future senior unsecured obligations, senior to all of the Company’s existing and future subordinated indebtedness and effectively subordinated to the Company’s existing and future secured indebtedness, including indebtedness under the Company’s revolving credit facility, to the extent of the value of the assets securing such indebtedness. The Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company’s subsidiaries that do not guarantee the Notes. The Notes are fully and unconditionally guaranteed jointly and severally on a senior basis by the Guarantors.
In connection with the issuance of the Notes, the Company and the Guarantors entered into a Registration Rights Agreement, dated as of October10, 2017 (the “Registration Rights Agreement”), with the representative of the Initial Purchasers. The Registration Rights Agreement requires the Company to register under the Securities Act the issuance, in exchange for the privately-placed Notes, of 5.875% Senior Notes due 2027 having substantially identical terms to the Notes and to complete the exchange or, if the exchange cannot be effected, to file and keep effective a shelf registration statement for resale of the privately-placed Notes. Failure of the Company to comply with the registration and exchange requirements in the Registration Rights Agreement within the specified time period would require the Company to pay as liquidated damages additional interest on the privately-placed Notes until the failure to comply is cured.
The foregoing descriptions of the Indenture, the Notes and the Registration Rights Agreement are qualified in their entirety to the forms of the Notes, the Indenture and the Registration Rights Agreement filed herewith as Exhibits 4.1, 4.2 and 4.3, respectively, and incorporated in this Item 1.01 by reference.
The Initial Purchasers or their affiliates have performed commercial banking, investment banking and advisory services for the Company from time to time for which they have received customary fees and reimbursement of expenses.
| Item 1.01. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 1.01.
On October10, 2017, the Company issued a press release announcing the completion of the refinancing transaction. A copy of this release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 1.01. | Financial Statements and Exhibits. |
(d) Exhibits
| 4.1 | Indenture, dated as of October10, 2017, between the Company, the Guarantors and U.S. Bank National Association, as trustee. |
| 4.2 | Form of 5.875% Senior Note due 2027 (included in Exhibit 4.1). |
| 4.3 | Registration Rights Agreement, dated as of October10, 2017, between the Company, the Guarantors and Credit Suisse Securities (USA) LLC, as representative of the Initial Purchasers. |
| 99.1 | Press release dated October10, 2017. |
BEAZER HOMES USA INC ExhibitEX-4.1 2 d457227dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 Indenture DATED AS OF OCTOBER 10,…To view the full exhibit click here
About BEAZER HOMES USA, INC. (NYSE:BZH)
Beazer Homes USA, Inc. is a geographically diversified homebuilder. As of September 30, 2016, the Company had operations in 13 states within over three geographic regions in the United States. The Company’s segments include West, East and Southeast. The Company markets and sells its products through its Website, www.beazer.com; mobile site, m.beazer.com; real estate listing sites, online advertising, including search engine marketing and display advertising, social media, video, brochures, direct marketing and out-of-home advertising, including billboards and signage, as well as other activities. It offers lender choice and personalization. The Company’s Choice Plans allows buyers to choose living areas, such as the kitchen and master bathroom. Its West segment includes Arizona, California, Nevada and Texas. Its East segment includes Indiana, Maryland/Delaware, Tennessee and Virginia. Its Southeast segment includes Florida, Georgia, North Carolina and South Carolina.
