New Home exchange participation notches up to 99.7% at final deadline

Chicago, June 30 – New Home Co. Inc. announced the final results of its exchange offer and consent solicitation relating to its $230,467,000 outstanding 7¼% senior notes due Oct. 15, 2025 (Cusips: 645370AC1, U64307AC2) for new 8¼% senior notes due Oct. 15, 2027, according to a press release on Wednesday evening.

At the final deadline, noteholders submitted 99.7% of their notes, or $229,759,000, for exchange.

By the early deadline of 5 p.m. ET on June 14, noteholders tendered $229,419,000 of the notes for exchange, or 99.55%, of the issue.

As a recap, New Home was offering an even exchange of existing notes for new notes, inclusive of a $50 early tender premium. Early tendering noteholders were also due a $20 cash consent payment.

The offer was modified at the early deadline so that noteholders who tendered their notes after the early deadline but before the expiration time would receive the full consideration, a one-for-one exchange. However, noteholders were no longer eligible for the consent payment.

Accrued interest will also be paid.

More information

The exchange notes will accrue interest at an annual rate of 8¼% beginning with the settlement date and ending on Oct. 14, 2025, 11% beginning on Oct. 15, 2025 through Oct. 14, 2026, and 12¼% beginning on Oct. 15, 2026 to, but excluding, the maturity date.

The exchange notes will initially be guaranteed by the same entities that guarantee the existing notes.

The exchange offer and consent solicitation expired at 5 p.m. ET on June 29. Settlement is expected on July 5.

Through privately negotiated noteholder support agreements holders of approximately 63% of the existing notes committed to tender all their existing notes at or prior to the early tender date before the offer launched.

Solicitation

Tendering noteholders were deemed to have consented in a related consent solicitation.

As part of the exchange offer, the company was soliciting consents with respect to the existing notes, to eliminate substantially all of the restrictive covenants and certain events of default in the indenture. The proposed amendments required the consent of the holders of at least a majority of the outstanding principal amount of existing notes excluding those notes owned by the company or by any holder directly or indirectly controlled by the company.

As the company received the requisite consents to effect the proposed amendments following early tender date, the company and the trustee have entered into a supplemental indenture which has become effective upon execution but will not become operative until the settlement date.

The commitment from holders representing 63% of the existing notes meant that the company fully expected to receive the requisite consents by the early deadline.

The company could have completed the exchange offer even if the consents were not received.

There was a minimum participation condition requiring that holders of at least 75% of the total principal amount of existing notes participate in the exchange offer, excluding any notes held by the company and its affiliates. The offer was also conditioned on the completion of an equity contribution in which funds managed by affiliates of Apollo Global Management, Inc. and/or one or more co-investors are expected to make a capital contribution to the company’s indirect parent totaling $25 million in exchange for additional equity in the form of common equity or comparable securities in the parent.

Global Bondholder Services Corp. is the exchange agent and information agent (866 654-2015, 212 430-3774, contact@gbsc-usa.com).

New Home is a homebuilder with is executive offices in Irvine, Calif.

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