Forestar Group Offers to Buy Back 3.850% Senior Notes Due 2026
Forestar Group Inc. has announced the commencement of a cash tender offer for the purchase of any and all outstanding 3.850% Senior Notes due 2026 (the “Notes”). This offer is being made in accordance with the terms and conditions outlined in the Offer to Purchase, dated March 5, 2025 (the “Offer to Purchase”), and the related Notice of Guaranteed Delivery, dated March 5, 2025 (the “Notice of Guaranteed Delivery”). These documents, collectively referred to as the “Offer Documents,” detail the terms and conditions of the Tender Offer.
Details of the Tender Offer
The Notes, which are subject to this Tender Offer, have the following specifications:
- Title of Security: 3.850% Senior Notes due 2026
- CUSIP Numbers / ISINs: Rule 144A: 346232 AF8 / US346232AF83, Reg. S: U3455L AC8 / USU3455LAC82
- Principal Amount Outstanding: $400,000,000
- U.S. Treasury Reference Security: 2.125% UST due May 15, 2025
- Bloomberg Reference Page: FIT3
- Fixed Spread (Basis Points): 0
Beginning May 15, 2025, Forestar has the right to redeem all or part of the Notes at a redemption price equal to 100.000% of the principal amount, along with accrued and unpaid interest, if applicable, up to the redemption date.
The Purchase Price for each $1,000 principal amount of Notes that are validly tendered and accepted for purchase will be determined based on the fixed spread plus the yield of the U.S. Treasury Reference Security. The pricing will be calculated based on the offer-side price of the reference security as quoted on Bloomberg Bond Trader FIT3 at 2:00 p.m. (New York City time) on March 11, 2025, which is the scheduled expiration date of the Tender Offer. The Purchase Price will be set according to a yield calculation up to May 15, 2025, assuming that the Notes will be redeemed at a redemption price of 100.000% of the principal amount.
Additional Consideration for Noteholders
In addition to the Purchase Price, holders of Notes accepted for purchase will receive accrued and unpaid interest from the last interest payment date up to, but excluding, the anticipated settlement date of March 14, 2025. This assumes that the Tender Offer is neither extended nor terminated early.
Tender Offer Process and Timeline
The Tender Offer is being conducted as per the Offer Documents. Interested parties may obtain copies of these documents from D.F. King & Co., Inc., which serves as the tender agent and information agent for the Tender Offer. They can be contacted at:
- Toll-Free: (866) 356-7813
- For Banks and Brokers: (212) 269-5550
The Tender Offer will expire at 5:00 p.m. (New York City time) on March 11, 2025, unless extended or terminated earlier. Noteholders must validly tender their Notes and ensure they are not withdrawn before this deadline to be eligible for the purchase consideration. Alternatively, they may opt for a guaranteed delivery, which allows them to submit Notes by March 13, 2025, at 5:00 p.m. (New York City time), provided they comply with guaranteed delivery procedures.
Settlement for Notes tendered before the expiration or through the Notice of Guaranteed Delivery is anticipated to occur on March 14, 2025. This settlement date may change if the Tender Offer is extended or terminated early.
Conditionality of the Tender Offer
There is no guarantee that any Notes will be purchased. The Tender Offer is subject to several conditions, including the successful completion of a Debt Financing transaction. The proceeds from this financing will be used to fund the Purchase Price for the Notes. However, the Tender Offer is not contingent on a minimum amount of Notes being tendered.
Forestar reserves the right to amend, extend, terminate, or withdraw the Tender Offer at its discretion. Any such decisions will be based on market conditions, financing outcomes, and other factors.
Potential Future Transactions
Following the completion of this Tender Offer, Forestar or its affiliates may choose to acquire additional Notes through various methods, including:
- Open market purchases
- Private negotiations
- Additional tender offers or exchange offers
- Redemption under the terms of the Notes
Such transactions may be conducted under terms that are either similar or different from the current Tender Offer, depending on Forestar’s strategic and financial considerations.
Dealer Managers for the Tender Offer
Forestar has enlisted the following firms as Dealer Managers for the Tender Offer:
- J.P. Morgan Securities LLC
- Liability Management Group
- Toll-Free: (866) 834-4666
- Collect: (212) 834-7489
- Mizuho Securities USA LLC
- TD Securities (USA) LLC
- Wells Fargo Securities, LLC
For questions about the terms of the Tender Offer, investors are encouraged to reach out to these Dealer Managers directly.
Legal and Regulatory Considerations
This press release does not constitute an offer to purchase or solicit the sale of any Notes or other securities. No offers, sales, or solicitations will be conducted in jurisdictions where such activities would be considered unlawful prior to proper registration or qualification under relevant securities laws.
