Toll Brothers and unit gets $1.91 billion revolver, extends term loan to 2028

By Mary-Katherine Stinson

Lexington, Ky., Feb. 16 – Toll Brothers, Inc. and its wholly-owned subsidiary, First Huntingdon Finance Corp., entered a five-year $1.905 billion senior revolving credit facility with Mizuho Bank, Ltd. as administrative agent on Feb. 14 which replaced the company’s existing agreement of the same amount, according to an 8-K filing with the Securities and Exchange Commission.

The company may request increases in the revolving commitments up to a total of $3 billion on the facility.

The revolving agreement will terminate Feb. 14, 2028.

Amounts may be borrowed, repaid and reborrowed until the termination date.

The new revolving agreement contains substantially the same terms and conditions as the former agreement including a maximum leverage ratio and a minimum net worth test and replaces the Libor-based interest rate with SOFR-based interest rate provisions subject to adjustment.

The five-level SOFR grid with 10 basis points CSA starts at 110 bps and goes to 175 bps.

The commitment fee will be between 12.5 bps and 25 bps.

Initial pricing is at SOFR plus 110 bps with a 12.5 bps commitment fee.

Joint lead arrangers and joint bookrunners for the new agreement are Mizuho Bank Ltd., Citibank, NA, BofA Securities, Inc., Goldman Sachs Bank USA, PNC Capital Markets LLC, Truist Securities Inc. and Wells Fargo Securities LLC.

Citibank, NA, Bank of America, NA, Goldman Sachs Bank USA, Mizuho Bank, Ltd., PNC Bank, NA, Truist Bank and Wells Fargo Bank, NA are the syndication agents.

BMO Harris Bank NA, Capital One, NA and U.S. Bank NA are the documentation agents.

Also on Feb. 14, Toll Brothers and First Huntingdon Finance entered a fifth amendment to the existing $650 million senior term loan agreement dated Feb. 3, 2014 with Truist Bank as administrative agent.

The amendment extends the maturity date of $487.5 million of outstanding term loans to Feb. 14, 2028, with $60.9 million due on Nov. 1, 2026 and the remaining $101.6 million due on Nov. 1, 2025.

Principal payments are not required before Nov. 1, 2025 but can be made without a penalty.

The amendment also replaced the interest-rate benchmark with SOFR from the previous Libor subject to adjustments.

The leverage-based five-level pricing grid starts at SOFR plus 80 bps and ends at 180 bps. The initial level is SOFR plus 80 bps. There is also 10 bps CSA.

The term loan agreement contains substantially the same terms and conditions as the revolving agreement, including a maximum leverage ratio and a minimum net worth test.

Both agreements are guaranteed by the company and its wholly owned home building subsidiaries.

For the term loan, Truist Securities, Inc. is the bookrunner and is joined by Wells Fargo Bank, NA as a joint lead arranger.

Wells Fargo Bank, NA and U.S. Bank NA are the co-syndication agents.

Capital One, NA is the documentation agent.

Toll Brothers is a Fort Washington, Pa.-based homebuilder.

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