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The New Home Company Inc. - Exchange & Consent Offer - Launch

The New Home Company Inc. Announces Commencement of Exchange Offer and Consent Solicitation

31 MAY 2023

Full announcement including disclaimers and offer restrictions available via Businesswire

"IRVINE, Calif.--(BUSINESS WIRE)--The New Home Company Inc. (the “Company”) announced its commencement of a private exchange offer to certain Eligible Holders (as defined herein) (the “Exchange Offer”) for any and all of the Company’s outstanding 7.250% Senior Notes due 2025 (the “Existing Notes”) for new 8.250% Senior Notes due 2027 (the “Exchange Notes”).

In connection with the Exchange Offer and Consent Solicitation (as defined herein), funds managed by affiliates of Apollo Global Management, Inc. and/or one or more co-investors are expected to make a capital contribution to the Company’s indirect parent in the aggregate amount of $25.0 million in exchange for additional equity in the form of common equity or comparable securities in such parent, the entire proceeds of which are expected to be contributed to the Company in exchange for additional common equity of the Company (the “Equity Contribution”). The Exchange Offer and Consent Solicitation are conditioned on, among other things, the consummation of the Equity Contribution and a condition that holders of at least 75% of the aggregate principal amount of Existing Notes (excluding any Existing Notes held by the Company and its affiliates) participate in the Exchange Offer (the “Minimum Participation Condition”).

In connection with the Exchange Offer and Consent Solicitation, the Company entered into privately negotiated noteholder support agreements with holders of approximately 63% of the Existing Notes, pursuant to which such holders have committed, among other things, to validly tender, and not validly withdraw, all of their Existing Notes at or prior to the Early Tender Date (as defined herein). As a result, we expect to receive the Requisite Consents (as defined herein) prior to the Early Tender Date. Such noteholder support agreements are subject to customary conditions for agreements of this type.

The following table sets forth the Total Consideration and the Exchange Consideration (each as defined herein) for the Exchange Notes:"

"As part of the Exchange Offer, the Company is soliciting consents (the “Consent Solicitation”) with respect to the Existing Notes, to eliminate substantially all of the restrictive covenants and certain events of default (the “Proposed Amendments”) in the indenture, dated as of October 28, 2020, governing the Existing Notes (as supplemented or otherwise modified prior to the Settlement Date, the “Existing Indenture”). The Proposed Amendments require the consent of the holders of at least a majority of the outstanding principal amount of Existing Notes (excluding Existing Notes owned by the Company or by any holder directly or indirectly controlling or controlled by or under direct or indirect common control with the Company) (the “Requisite Consents”). For each $1,000 principal amount of Existing Notes validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on June 14, 2023, unless extended (such date and time, as the same may be extended, the “Early Tender Date”), Eligible Holders of Existing Notes will be eligible to receive a consent payment of $20.00 in cash (the “Consent Payment”). On or promptly following the Early Tender Date, if the Company receives the Requisite Consents to effect the Proposed Amendments to the Existing Indenture, the Company and the trustee of the Existing Notes will enter into a supplemental indenture relating to the Proposed Amendments (the “Supplemental Indenture”). The Supplemental Indenture will become effective upon its execution; however, the Proposed Amendments therein will not become operative unless and until Existing Notes representing at least the Requisite Consents are validly tendered and not validly withdrawn and accepted for exchange pursuant to the Exchange Offer on the Settlement Date. The Company intends to announce the receipt of the Requisite Consents and the execution of the Supplemental Indenture by press release. In the event that the Company does not receive the Requisite Consents, the Existing Indenture will remain in effect in its current form. The Company may, though it is not obligated to, complete the Exchange Offer even if the Requisite Consents are not received."



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