Item 1.01 Entry into a Material Definitive Agreement.
On March 10, 2017, Toll Brothers Finance Corp., Inc. (the Issuer), a wholly-owned subsidiary of Toll Brothers, Inc. (the
Company), completed the public offering of $300,000,000 aggregate principal amount of its 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 March 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 Senior Notes, dated as of March 10, 2017 (the Authorizing Resolution and, together with the Base Indenture, 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 Issuer will pay interest on the Senior 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 Senior Notes will mature on March 15, 2027.
The Issuer may redeem the Senior 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 Authorizing Resolution. In the event of a change of control repurchase event (as defined in the Indenture), the holders of the Senior Notes may require the Issuer to purchase for cash all or a portion of their Senior Notes at
a purchase price equal to 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. The Senior 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 Senior Notes may not enforce the Indenture or the Senior 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 Senior Notes, the Trustee or the holders of not less than 25% in aggregate principal amount of the Senior Notes then
outstanding may declare the principal amount of the Senior 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 Senior Notes will automatically become and be immediately due and payable. Any event of default with respect to the Senior Notes (except defaults in payment of principal of (or premium, if any, on) or interest, if any, on the Senior Notes or a
default in respect of a covenant or provision that cannot be modified without the consent of the holder of each outstanding Senior Note) may be waived by the holders of at least a majority in aggregate principal amount of the Senior Notes
outstanding.
We intend to use the net proceeds from the offering of the Senior Notes for general corporate purposes, which may include
the repayment of indebtedness.