Taylor Morrison begins exchange, consent bid, change-of-control offers for William Lyon notes

By Wendy Van Sickle

Columbus, Ohio, Dec. 5 – Taylor Morrison Communities, Inc. announced the commencement of exchange offers, consent solicitations and change-of-control offers for notes issued by William Lyon Homes, Inc. in connection with Taylor Morrison’s previously announced proposed acquisition of William Lyon.

Exchange offers, consent bid

Taylor Morrison is offering to exchange any and all of three series of the William Lyon notes for up to $1.09 billion of new notes issued by Taylor Morrison. Each series of new notes will carry the same coupon and maturity date as the relevant series of existing notes.

The notes include $350 million of 6% senior notes due Sept. 1, 2023, $436,886,000 of 5 7/8% senior notes due Jan. 31, 2025 and $300 million of 6 5/8% senior notes due July 15, 2027.

Taylor Morrison is concurrently soliciting consents to some proposed amendments to each of the indentures governing the William Lyon notes for a separate cash consent payment of $2.50 in cash per $1,000 principal amount.

The proposed amendments eliminate substantially all of the covenants in each indenture, including the requirement to offer to repurchase the William Lyon notes upon a change of control, and eliminate other restrictive provisions and events that may lead to an event of default.

The proposed amendments require the consent of the eligible holders of at least a majority in principal amount of the notes outstanding of each series, excluding notes held by William Lyon or any affiliate.

Each exchange offer and consent solicitation is conditioned upon, among other things, the completion of the other exchange offers and consent solicitations.

They are also conditioned on closing of the merger.

Each exchange offer will expire at 12:01 a.m. ET on Jan. 6.

The deadline to receive the consent payment is 5 p.m. ET on Dec. 18.

Settlement is expected to occur promptly after the expiration date, and the expiration date of each exchange offer is expected to be extended such that settlement coincides with closing of the merger.

Global Bondholder Services Corp. (866 807-2200, 212 430-3774 or https://gbsc-usa.com/eligibility/taylormorrison) is the exchange and information agent.

Separate consent bids

Taylor Morrison is separately soliciting consents to the proposed amendments from holders of each series of William Lyon notes who are not eligible holders.

Such holders that validly deliver their consents to the proposed amendments by 5 p.m. ET on Dec. 18 will be entitled to receive a consent payment of $2.50 in cash per $1,000 principal amount of William Lyon notes.

Documents relating to the separate consent solicitations will only be distributed to holders of William Lyon notes who complete and return an eligibility form confirming that they are neither a U.S. person that is a qualified institutional buyer under Rule 144A or an accredited investor under Regulation D nor a person that is not a U.S. person under Regulation S, outside the United States and a non-U.S. qualified offeree for purposes of applicable securities laws.

Global Bondholder Services Corp. (866 807-2200, 212 430-3774 or https://gbsc-usa.com/eligibility/taylormorrison) is the tabulation and information agent.

Change-of-control offers

Taylor Morrison has also commenced change-of-control offers in connection with the merger, which offers are conditioned upon closing of the merger.

The change of control offers will expire at 12:01 a.m. ET on Jan. 6.

The consideration offered for each $1,000 of William Lyon notes tendered under the change of control offers is $1,010.

Holders will also receive accrued interest to but excluding the settlement date.

In addition, if, with respect to any series of William Lyon notes, the requisite consents are received under the consent solicitations and the proposed amendments become operative for a series of notes, William Lyon will no longer have an obligation to make a change of control offer for that series, and Taylor Morrison will terminate the change of control offer for that series.

Taylor Morrison plans to have settlement of any change-of-control offer that is not terminated coincide with the closing date of the merger.

If a holder wishes to tender its William Lyon notes in the exchange offers, it should not tender them in the change of control offers.

Global Bondholder Services Corp. (866 807-2200, 212 430-3774 or https://gbsc-usa.com/eligibility/taylormorrison) is the depository and paying agent for the change of control offers.

Taylor Morrison is a Scottsdale, Ariz.-based homebuilder. William Lyon is a Newport Beach, Calif.-based homebuilder.

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