TOLL BROTHERS, INC. (NYSE:TOL) Files An 8-K Entry into a Material Definitive AgreementItem 2.03 Entry into a Material Definitive Agreement.
On January 17, 2018, Toll Brothers Finance Corp. (the “Issuer”), a wholly-owned subsidiary of Toll Brothers, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with the Company, as guarantor, and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC, SunTrust Robinson Humphrey, Inc., and Wells Fargo Securities, LLC as representatives of the several underwriters named therein (the “Underwriters”), with respect to a public offering of $400,000,000 aggregate principal amount of its 4.350% Senior Notes due 2028 (the “Senior Notes”), guaranteed by the Company and certain of its subsidiaries. The Underwriting Agreement contains the terms and conditions of the offering and sale of the Senior Notes, indemnification and contribution obligations and other customary terms and conditions.
On January 22, 2018, the Issuer completed the offering of the Senior Notes. The Senior Notes have been registered under the Securities Act of 1933, as amended (the “Securities Act”), to the Company’s universal shelf registration statement on Form S-3 (File No. 333-202046), as supplemented by the prospectus supplement dated January 17, 2018, filed with the Securities and Exchange Commission under the Securities Act.
The Senior Notes were issued (and the guarantees delivered) to an indenture (the “Base Indenture”), dated as of February 7, 2012, among the Issuer, the guarantors named therein, including the Company (collectively, the “Guarantors”), and The Bank of New York Mellon, as trustee (the “Trustee”), as amended and supplemented by the resolution authorizing the Senior Notes, dated as of January 22, 2018 (the “Authorizing Resolution” and, together with the Base Indenture, the “Indenture”). Copies of the Underwriting Agreement, the Base Indenture, the Authorizing Resolution, and the form of Senior Note are attached hereto as Exhibits 1.1, 4.1, 4.2 and 4.3, respectively, and are incorporated herein by reference. The description of the Underwriting Agreement, the Indenture and the Senior Notes in this report are summaries and are qualified in their entirety by the terms of the Underwriting Agreement, the Indenture and the form of Senior Note.
The Senior Notes are unsecured and unsubordinated obligations of the Issuer and rank equally and ratably with the other unsecured and unsubordinated indebtedness of the Issuer. The Senior Notes and the guarantee of the Company are structurally subordinated to the prior claims of creditors of non-guarantor subsidiaries of the Company.
The Issuer will pay interest on the Senior Notes semi-annually in arrears on February 15 and August 15, beginning August 15, 2018 to holders of record on the preceding February 1 or August 1, as the case may be. Interest will be calculated on the basis of a 360-day year of twelve 30-day months. The Senior Notes will mature on February 15, 2028.
The Issuer may redeem the Senior Notes in whole or in part at any time and from time to time prior to their stated maturity at the redemption prices set forth in the Authorizing Resolution. In the event of a change of control repurchase event (as defined in the Indenture), the holders of the Senior Notes may require the Issuer to purchase for cash all or a portion of their Senior Notes at a purchase price equal to 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. The Senior Notes are subject to certain customary covenants, including limitations on the ability of the Company and its subsidiaries, with exceptions, to incur debt secured by liens and to engage in sale and lease-back transactions.
Holders of the Senior Notes may not enforce the Indenture or the Senior Notes except as provided therein. In case an event of default (other than a default resulting from bankruptcy, insolvency or reorganization) shall occur and be continuing with respect to the Senior Notes, the Trustee or the holders of not less than 25% in aggregate principal amount of the Senior Notes then outstanding may declare the principal amount of the Senior Notes and interest, if any, accrued thereon to be due and payable immediately. If an event of default results from bankruptcy, insolvency or reorganization, all amounts due and payable on the Senior Notes will automatically become and be immediately due and payable. Any event of default with respect to the Senior Notes (except defaults in payment of principal of (or premium, if any, on) or interest, if any, on the Senior Notes or a default in respect of a covenant or provision that cannot be modified without the consent of the holder of each outstanding Senior Note) may be waived by the holders of at least a majority in aggregate principal amount of the Senior Notes outstanding.
The Company intends to use the net proceeds from the offering of the Senior Notes for general corporate purposes, which may include the repayment of indebtedness.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information provided in Item 2.03 of this report is incorporated by reference into this Item 2.03.
Item 2.03 Other Events.
In connection with the offering of the Senior Notes, the Company is filing the legal opinions relating to the offering as Exhibit 5.1 and 5.2 to this report.
Item 2.03 Financial Statements and Exhibits.
d) Exhibits
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Underwriting Agreement, dated January 17, 2018, among Toll Brothers Finance Corp., Toll Brothers, Inc., as guarantor, and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC as representatives of the several underwriters named therein.
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Form of Global Note for the Issuer’s 4.350% Senior Notes due 2028.
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Opinion of Cravath, Swaine & Moore LLP.
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Consent of Cravath, Swaine & Moore LLP (included as part of Exhibit 5.1).
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TOLL BROTHERS INC ExhibitEX-1.1 2 ex1-1.htm UNDERWRITING AGREEMENT Exhibit 1.1 Toll Brothers Finance Corp. $400,…To view the full exhibit click here
About TOLL BROTHERS, INC. (NYSE:TOL)
Toll Brothers, Inc. designs, builds, markets and arranges financing for detached and attached homes in luxury residential communities. The Company caters to move-up, empty nester, active-adult, age-qualified and second-home buyers in the United States (Traditional Home Building Product). The Company operates in two segments: traditional home building and urban infill. Within traditional home building, it operates in approximately five geographic segments around the United States: the North, consisting of Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York; the Mid-Atlantic, consisting of Delaware, Maryland, Pennsylvania and Virginia; the South, consisting of Florida, North Carolina and Texas; the West, consisting of Arizona, Colorado, Nevada and Washington, and California. It also builds and sells homes in urban infill markets through Toll Brothers City Living (City Living). As of October 31, 2015, it was operating in approximately 20 states.
