Meritage Homes Announces Offering of Convertible Senior Notes

SCOTTSDALE, Ariz., May 06, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH, “Meritage” or the “Company”), the fifth-largest homebuilder in the U.S., today announced that it has commenced an offering of $500 million aggregate principal amount of its Convertible Senior Notes due 2028 (the “notes”), subject to market and other conditions. The Company also expects to grant the initial purchasers of the notes a 13-day option to purchase up to $75 million of aggregate principal amount of additional notes.

The notes will be senior, unsecured obligations of the Company and will be guaranteed fully, unconditionally, and jointly and severally initially by each of the Company’s direct and indirect owned subsidiaries from time to time guaranteeing the Company’s existing senior notes, that is a guarantor or obligor under the Company’s existing revolving credit agreement or that is a guarantor or obligor with respect to certain refinancing indebtedness with respect to the Company’s existing senior notes. Interest related to the notes is expected to be payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2024. The Company will satisfy any conversion elections by paying cash up to the aggregate principal amount of the notes to be converted and paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the notes being converted. The interest rate, the initial conversion rate, and certain other terms of the offering will be determined at the time of pricing. The offering is subject to market conditions, and there can be no assurance as to whether or when the offering will be completed, or as to the actual size or terms of the offering.

The Company intends to use the net proceeds received from the offering to pay the cost of entering into capped call transactions, as described below, to redeem all of its outstanding 6.00% Senior Notes due 2025 and the remainder for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, the Company expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions, as described below, and to use the remainder of such net proceeds for general corporate purposes.