D.R. Horton says holders converted zero-coupon 21 notes rather than redeeming them

New York, June 26 - D.R. Horton Inc. said that it was advised by the paying agent for its previously announced redemption offer for its zero-coupon convertible senior notes due 2021 that all of the notes were presented by their holders for conversion into D.R. Horton common stock rather than redeemed for cash under the offer as scheduled on June 26. As a result, the company has issued approximately 10 million shares of common stock in exchange for the notes.

The company said that the settlement of its convertible notes for stock will strengthen D.R. Horton's balance sheet and improve its debt-to-total capitalization ratio by approximately 400 basis points.

As previously announced, D.R. Horton, an Arlington, Tex.-based homebuilder, said on May 27 it would call all of its outstanding zero-coupon convertible senior notes due 2021 for redemption on June 26, subject to possible extension.

The company noted that under the terms of the notes' indenture, it could redeem the notes for cash by paying the note holders a redemption price equal to the notes' accreted value plus any accrued and unpaid contingent interest.

It estimated that the redemption price for the notes on the scheduled redemption date would be approximately $561.9557 per $1,000 principal amount at maturity.

D.R. Horton also noted that the notes would alternatively be convertible into DHI common stock until 5 p.m. ET on June 25, at a conversion rate of 26.2391 common shares per $1,000 principal amount at maturity of the notes.

The company further noted that the aggregate principal amount of the notes at maturity was $381,113,000, and said that if none of the notes were to be converted, the aggregate cash redemption price for all of the outstanding notes would be approximately $214,168,630.

American Stock Transfer & Trust Co. (800-937-5449) was the trustee for the notes, paying agent and conversion agent.

MeriStar Hospitality plans 4 ¾% '04 note redemption with new-deal proceeds

New York, June 26 - MeriStar Hospitality Corp. said that it had priced an offering of $155 million principal amount of 9 ½% convertible subordinated notes due 2010, with a greenshoe option for an additional $15 million of notes.

MeriStar, a Washington, D.C. based real estate investment trust specializing in lodging industry properties, said that it expects to use the net proceeds from the offering to repurchase or redeem substantially all of the company's outstanding 4 ¾% convertible subordinated notes due 2004. Any net proceeds not used in the purchase or redemption of the 4 ¾% notes are expected to be used to repurchase other debt.

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