Item 1.01 Entry into a Material Definitive Agreement.
On June 12, 2017, Toll Brothers Finance Corp., Inc. (the Issuer), a wholly-owned subsidiary of Toll Brothers, Inc. (the
Company), completed the public offering of an additional $150,000,000 aggregate principal amount of its previously established 4.875% Senior Notes due 2027 (the Senior Notes), guaranteed by the Company and certain of its
subsidiaries. The Senior Notes have been registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to the Companys universal shelf registration statement on Form
S-3
(File
No. 333-202046),
as supplemented by the prospectus supplement dated June 7, 2017, previously filed with the Securities and Exchange Commission under
the Securities Act.
The Senior Notes were issued (and the guarantees delivered) pursuant to an indenture (the Base
Indenture), dated as of February 7, 2012, among the Issuer, the guarantors named therein, including the Company (collectively, the Guarantors), and The Bank of New York Mellon, as trustee (the Trustee), as amended
and supplemented by the resolution authorizing the previously issued 4.875% Senior Notes due 2027, dated as of March 10, 2017 (the Initial Authorizing Resolution), and by the resolution authorizing the Senior Notes, dated as of
June 12, 2017 (the Authorizing Resolution and, together with the Base Indenture and the Initial Authorizing Resolution, the Indenture). Copies of the Base Indenture, the Authorizing Resolution, and the form of Senior
Note are attached hereto as Exhibits 4.1, 4.2 and 4.3, respectively, and are incorporated herein by reference. The description of the Indenture and the Senior Notes in this report are summaries and are qualified in their entirety by the terms of the
Indenture and the form of Senior Note.
The Senior Notes are unsecured and unsubordinated obligations of the Issuer and rank equally and
ratably with the other unsecured and unsubordinated indebtedness of the Issuer. The Senior Notes and the guarantee of the Company are structurally subordinated to the prior claims of creditors of
non-guarantor
subsidiaries of the Company.
The Senior Notes were issued at an issue price of 103.655% of principal plus an amount equal to accrued
interest from, and including, March 10, 2017 to, but excluding, June 12, 2017. The Senior Notes and the Issuers previously issued $300,000,000 aggregate principal amount of 4.875% Senior Notes due 2027 will form a single series of
securities under the Base Indenture (hereinafter referred to collectively as the Notes). The Issuer will pay interest on the Notes semi-annually in arrears on March 15 and September 15, beginning September 15, 2017, to
holders of record on the preceding March 1 or September 1, as the case may be. Interest will be calculated on the basis of a
360-day
year of twelve
30-day
months. The Notes will mature on March 15, 2027.
The Issuer may redeem the Notes in whole or in part at any time and from time to
time prior to their stated maturity at the redemption prices set forth in the Initial Authorizing Resolution. In the event of a change of control repurchase event (as defined in the Indenture), the holders of the Notes may require the Issuer to
purchase for cash all or a portion of their Notes at a purchase price equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. The Notes are subject to certain
customary covenants, including limitations on the ability of the Company and its subsidiaries, with exceptions, to incur debt secured by liens and to engage in sale and lease-back transactions.
Holders of the Notes may not enforce the Indenture or the Notes except as provided therein. In case an event of default (other than a default
resulting from bankruptcy, insolvency or reorganization) shall occur and be continuing with respect to the Notes, the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the principal
amount of the Notes and interest, if any, accrued thereon to be due and payable immediately. If an event of default results from bankruptcy, insolvency or reorganization, all amounts due and payable on the Notes will automatically become and be
immediately due and payable. Any event of default with respect to the Notes (except defaults in payment of principal of (or premium, if any, on) or interest, if any, on the Notes or a default in respect of a covenant or provision that cannot be
modified without the consent of the holder of each outstanding Note) may be waived by the holders of at least a majority in aggregate principal amount of the Notes outstanding.
We intend to use the net proceeds from the offering of the Senior Notes for general corporate purposes.