M.D.C. Holdings Inc.
09/26/2024 | Press release | Distributed by Public on 09/26/2024 11:11
Material Agreement Form 8 K
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Effective September 20, 2024, HomeAmerican Mortgage Corporation ("HomeAmerican"), a wholly-owned subsidiary of M.D.C. Holdings, Inc., entered into the Second Amended and Restated Master Repurchase Agreement (the "Restated Repurchase Agreement") with U.S. Bank National Association ("USBNA") as agent and a buyer (the "Buyer"). The Restated Repurchase Agreement amends and restates the prior Master Repurchase Agreement with USBNA dated as of September 16, 2016, as amended, which contained similar terms. The Restated Repurchase Agreement increases the facility amount and extends the expiration date (as noted below).
The Restated Repurchase Agreement provides financing and liquidity to HomeAmerican by facilitating purchase transactions in which HomeAmerican transfers eligible loans to USBNA, as agent for the Buyer, from time to time against the transfer of funds by the Buyer, with a simultaneous agreement by the Buyer to transfer back to HomeAmerican such mortgage loans at a date certain or on demand upon an event of default, or if no demand is sooner made, on the expiration of the Restated Repurchase Agreement, against the transfer of funds by HomeAmerican. Until such mortgage loans are transferred back to HomeAmerican, such loans are held by USBNA, as agent for the Buyer and as custodian, pursuant to the Custody Agreement ("Custody Agreement") dated as of September 20, 2024, by and between HomeAmerican and USBNA. The Restated Repurchase Agreement has an aggregate commitment of $150 million and includes an increase feature that permits the maximum aggregate commitment to be increased from time to time in increments of $5 million, with a minimum increase of $25 million and a maximum increase of $150 million, for a period of time designated by HomeAmerican (but not less than 30 days or, if less, the time remaining until the Restated Repurchase Agreement expires). Any such increase is in the sole discretion of USBNA. The Restated Repurchase Agreement expires on August 8, 2025.
Advances under the Restated Repurchase Agreement carry a Pricing Rate based on the SOFR Rate plus the SOFR Margin, as defined in the Restated Repurchase Agreement. The Restated Repurchase Agreement contains various representations, warranties and affirmative and negative covenants customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Restated Repurchase Agreement.