IRVINE, Calif.--(BUSINESS WIRE)--The New Home Company Inc. (the “Company”) today announced the expiration and final results of the previously-announced private exchange offer to certain Eligible Holders (as defined herein) (the “Exchange Offer”) for any and all of the Company’s outstanding 7.250% Senior Notes due 2025 (the “Existing Notes”) for new 8.250% Senior Notes due 2027 (the “Exchange Notes”) and the related consent solicitation (the “Consent Solicitation”) with respect to the Existing Notes, to eliminate substantially all of the restrictive covenants and certain events of default (the “Proposed Amendments”) in the indenture, dated as of October 28, 2020, governing the Existing Notes (as supplemented or otherwise modified prior to the Settlement Date (as defined herein), the “Existing Indenture”).
The Exchange Offer and Consent Solicitation expired at 5:00 p.m., New York City time, on June 29, 2023 (the “Expiration Date”). According to information provided by Global Bondholder Services Corporation (“GBSC”), the Exchange Agent and Information Agent for the Exchange Offer and Consent Solicitation, as of 5:00 p.m., New York City time, on the Expiration Date, the Company had received valid (and not withdrawn) tenders and valid (and not revoked) consents from holders of $229,759,000 in aggregate principal amount of the Existing Notes, representing approximately 99.7% of the aggregate principal amount outstanding of the Existing Notes. The Company expects the Exchange Offer and Consent Solicitation to settle on July 5, 2023 (such date, the “Settlement Date”).
The following table sets forth the Total Consideration and the Exchange Consideration (each as defined herein) for the Exchange Notes:
Existing
|
CUSIP / ISIN(1) |
Maturity
|
Aggregate
|
Consent
|
Exchange
|
Early
|
Total
|
|||||||
7.250% Senior Notes due 2025 |
|
(144A) 645370AC1 / US645370AC18
|
|
October 15, 2025 |
|
$230,467,000 |
|
$20.00 in cash |
|
$950 principal amount of Exchange Notes |
|
$50 principal amount of Exchange Notes |
|
$1,000 principal amount of Exchange Notes plus $20.00 in cash |
| ____________________ | ||
(1) |
No representation is made as to the correctness or accuracy of such CUSIP or ISIN numbers. |
|
|
|
|
(2) |
For each $1,000 principal amount of Existing Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date. On the Settlement Date, a consent payment of $20.00 in cash (the “Consent Payment”) will be paid to each Eligible Holder that validly tendered and did not validly withdraw Existing Notes at or prior to the Early Tender Date. Eligible Holders who validly tender their Existing Notes after the Early Tender Date will not be eligible to receive the Consent Payment. |
|
|
|
|
(3) |
Eligible Holders of Existing Notes that are accepted for exchange pursuant to the Exchange Offer will be entitled to receive accrued and unpaid interest in cash on such Existing Notes up to, but excluding, the Settlement Date. |
|
|
|
|
(4) |
For each $1,000 principal amount of Existing Notes accepted for exchange at or prior to the Expiration Date. On the Settlement Date, any Eligible Holder who validly tendered (and did not validly withdraw) Existing Notes at or prior to the Expiration Date will be eligible to receive $950 principal amount of Exchange Notes (the “Exchange Consideration”). |
|
|
|
|
(5) |
For each $1,000 principal amount of Existing Notes validly tendered and not validly withdrawn at or prior to the Expiration Date. On the Settlement Date, an early tender premium, payable in Exchange Notes, equal to $50 (the “Early Tender Premium”) will be paid to each Eligible Holder who validly tendered and did not validly withdraw Existing Notes at or prior to the Expiration Date. |
|
|
|
|
(6) |
The Exchange Notes will accrue interest at an annual rate of (i) 8.250% for the period beginning with the Settlement Date and ending on October 14, 2025, (ii) 11.000% for the period beginning on October 15, 2025 through October 14, 2026, and (iii) 12.250% for the period beginning on October 15, 2026 to (but excluding) the maturity date of the Exchange Notes. |
|
The Exchange Offer and Consent Solicitation were made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement, dated May 31, 2023 (the “Offering Memorandum”). Consummation of the Exchange Offer and Consent Solicitation was subject to funds managed by affiliates of Apollo Global Management, Inc. and/or one or more co-investors making a capital contribution to the Company’s indirect parent in the aggregate amount of $25.0 million in exchange for additional equity in the form of common equity or comparable securities in such parent, and such proceeds being contributed to the Company in exchange for additional common equity of the Company (the “Equity Condition”). The Exchange Offer and Consent Solicitation were also conditioned on the holders of at least 75% of the aggregate principal amount of Existing Notes (excluding any Existing Notes held by the Company and its affiliates) participating in the Exchange Offer (the “Minimum Participation Condition”). Both the Equity Condition and the Minimum Participation Condition have been satisfied as of the Expiration Date.
As a result of having received valid (and not withdrawn) tenders and valid (and not revoked) consents from holders of approximately 99.55% of the aggregate principal amount outstanding of the Existing Notes as of the Early Tender Date, the Company and the trustee under the Existing Indenture entered into a supplemental indenture to the Existing Indenture to effect the Proposed Amendments (the “Supplemental Indenture”). The Proposed Amendments therein will not become operative unless and until Existing Notes representing at least a majority of the outstanding principal amount of Existing Notes (excluding Existing Notes owned by the Company or by any holder directly or indirectly controlling or controlled by or under direct or indirect common control with the Company) (the “Requisite Consents”) are accepted for exchange pursuant to the Exchange Offer on the Settlement Date.
Documents relating to the Exchange Offer and Consent Solicitation were only distributed to persons who certified that (1) they are (a) a “Qualified Institutional Buyer,” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or (b) a person that is not a U.S. person (as defined in Regulation S under the Securities Act) acquiring Exchange Notes in an offshore transaction, and if they are in the European Economic Area, the United Kingdom or another relevant jurisdiction other than Canada, they are “non-U.S. qualified offerees” (as defined in the Offering Memorandum), and (2) to the extent they are located in a province or territory of Canada, they are “non-U.S. Canadian qualified offerees” (as defined in the Offering Memorandum) (such persons, “Eligible Holders”).
The Exchange Notes have not been, and will not be, registered under the Securities Act, or any state or foreign securities laws. The Exchange Notes may not be offered or sold in the United States or to any U.S. person except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
This press release is provided for informational purposes only and does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful. The Exchange Offer and Consent Solicitation were made solely pursuant to the Offering Memorandum and only to such persons and in such jurisdictions as were permitted under applicable law.
About The New Home Company Inc.
New Home Co. is a western regional builder and real estate development company headquartered in Irvine, California. It has divisions within select growth markets in California, Arizona, Colorado, Oregon and Washington.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical fact, including statements regarding the settlement of the Exchange Offer, are forward-looking statements. These forward-looking statements are frequently accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “goal,” “plan,” “could,” “can,” “seeks,” “might,” “should,” and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described (and incorporated by reference) in the Offering Memorandum. Those factors, among others, may cause actual results to differ materially from any future results expressed or implied by these forward-looking statements. The forward-looking statements contained in the press release speak only as of the date of the press release. The Company undertakes no obligation to revise or publicly release any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.