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Forestar Announces New $380 Million Senior Unsecured Revolving Credit Facility

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 17, 2018-- Forestar Group Inc. (“Forestar”) (NYSE: FOR) announced that it has entered into a three-year $380 million senior unsecured revolving credit facility. The facility has an uncommitted $190 million accordion feature which could increase the facility to $570 million, subject to certain conditions and availability of additional bank commitments. The facility includes a letter of credit sublimit equal to 50% of the revolving credit commitment, for an initial sublimit of $190 million.

The facility includes financial covenants that require the Company to maintain a minimum level of tangible net worth, a minimum level of liquidity and a leverage ratio below a maximum level. The pricing schedule for outstanding commitments, borrowings and letters of credit is based on the Company’s leverage ratio. Availability under the facility is subject to a borrowing base determined by the book value of the Company’s real estate assets and unrestricted cash balances.

JPMorgan Chase Bank, N.A., Citibank, N.A., Mizuho Bank, Ltd. and Wells Fargo Securities, LLC acted as Joint Lead Arrangers and Joint Bookrunners.

Donald J. Tomnitz, Chairman of the Board, said, “We are excited about our growth opportunities and believe this is an opportune time to add a revolving credit facility to Forestar’s capital structure. We appreciate the commitment our valued bank lenders are making to Forestar and their support of our business.”

About Forestar Group Inc.

Forestar Group Inc. is a residential and real estate development company with operations in 20 markets in 11 states at June 30, 2018, where it owns, directly or through joint ventures, interests in residential and mixed-use projects. Forestar is a majority-owned subsidiary of D.R. Horton, Inc., the largest homebuilder by volume in the United States for sixteen consecutive years.

Forward-Looking Statements

Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Forestar on the date this release was issued. Forestar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that the facility could increase to $570 million, subject to certain conditions and availability of additional bank commitments.

Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: general economic, market or business conditions in Texas, where our real estate activities are concentrated, or on a national or global scale; our ability to achieve some or all of our key initiatives; the opportunities (or lack thereof) that may be presented to us and that we may pursue; our ability to hire and retain key personnel; future residential or commercial entitlements, development approvals and the ability to obtain such approvals; obtaining approvals of reimbursements and other payments from special improvement districts and the timing of such payments; accuracy of estimates and other assumptions related to investment in and development of real estate, the expected timing and pricing of land and lot sales and related cost of real estate sales, impairment of long-lived assets, income taxes, share-based compensation; the levels of resale housing inventory in our mixed-use development projects and the regions in which they are located; fluctuations in costs and expenses, including impacts from shortages in materials or labor; demand for new housing, which can be affected by a number of factors including the availability of mortgage credit, job growth and fluctuations in commodity prices; competitive actions by other companies; changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies; our partners’ ability to fund their capital commitments and otherwise fulfill their operating and financial obligations; inability to obtain permits for, or changes in laws, governmental policies or regulations affecting, water withdrawal or usage; the effect of D.R. Horton's controlling level of ownership on us and our stockholders; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our merger with D.R. Horton on our ability to maintain relationships with our vendors and customers; and the final resolutions or outcomes with respect to our contingent and other liabilities related to our business. Additional information about issues that could lead to material changes in performance is contained in Forestar’s annual report on Form 10-K and our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission (SEC).

Source: Forestar Group Inc.

Forestar Group Inc.
Charles D. Jehl
Chief Financial Officer