KB Home Announces Upsizing and Pricing of Senior Notes Due 2020
February 01 2012 - 6:13PM
Business Wire
KB Home (NYSE: KBH), one of the nation’s premier homebuilders,
today announced that it has upsized and priced an offering of $350
million in aggregate principal amount of senior notes due 2020 (the
“2020 Senior Notes”). The size of the offering was increased from
the previously announced $250 million. The notes will bear interest
at 8.0% per annum and be issued at a public offering price of
98.523% of their face amount. The Company expects to close the 2020
Senior Note offering on February 7, 2012, subject to the
satisfaction of customary closing conditions.
KB Home also intends to upsize and amend certain terms of its
previously announced cash tender offers for its 5¾% Senior Notes
due 2014 and for its 5⅞% Senior Notes due 2015 and 6¼% Senior Notes
due 2015 (the “2014/2015 Notes”), and to use the net proceeds from
the offering of the 2020 Senior Notes to purchase notes validly
tendered in the applicable tender offers and accepted for purchase.
After payment for such validly tendered and accepted notes,
KB Home would use any remaining net proceeds from the sale of
the 2020 Senior Notes for general corporate purposes.
Citigroup, Credit Suisse, BofA Merrill Lynch and Deutsche Bank
Securities are acting as joint book-running managers for the 2020
Senior Notes offering. A shelf registration statement covering the
issuance of the 2020 Senior Notes has been filed with the
Securities and Exchange Commission and is effective. Copies of the
prospectus supplement and accompanying prospectus describing the
offering may be obtained by visiting EDGAR on the SEC’s web site at
www.sec.gov or by contacting Citigroup at the following address:
Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New
York 11220 or by telephone at 1-877-858-5407 or by e-mail at
batprospectusdept@citi.com.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any 2020 Senior Notes nor shall
there be any sale of 2020 Senior Notes in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. The 2020 Senior Notes offering is being made only by
means of the prospectus supplement and accompanying prospectus.
About KB Home
KB Home (NYSE: KBH), one of the nation’s premier homebuilders,
has delivered over half a million quality homes for families since
its founding in 1957. The Los Angeles-based company is
distinguished by its Built to Order™ homebuilding approach that
puts a custom home experience within reach of its customers at an
affordable price. KB Home has been named the #1 Green Homebuilder
in a study by Calvert Investments and the #1 Homebuilder on FORTUNE
magazine’s 2011 World’s Most Admired Companies list. The Company
trades under the ticker symbol “KBH” and was the first homebuilder
listed on the New York Stock Exchange. For more information about
any of KB Home's new home communities, call 888-KB-HOMES or visit
www.kbhome.com.
Forward-Looking and Cautionary Statements
Certain matters discussed in this press release, including any
statements that are predictive in nature or concern future market
and economic conditions, business and prospects, our future
financial and operational performance, or our future actions and
their expected results are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on current expectations and
projections about future events and are not guarantees of future
performance. We do not have a specific policy or intent of updating
or revising forward-looking statements. Actual events and results
may differ materially from those expressed or forecasted in
forward-looking statements due to a number of factors. The most
important risk factors that could cause our actual performance and
future events and actions to differ materially from such
forward-looking statements include, but are not limited to: general
economic, employment and business conditions; adverse market
conditions that could result in additional impairments or land
option contract abandonment charges and operating losses, including
an oversupply of unsold homes, declining home prices and increased
foreclosure and short sale activity, among other things; conditions
in the capital and credit markets (including residential consumer
mortgage lending standards, the availability of residential
consumer mortgage financing and mortgage foreclosure rates);
material prices and availability; labor costs and availability;
changes in interest rates; inflation; our debt level, including our
ratio of debt to total capital, and our ability to adjust our debt
level and structure and to access the credit, capital or other
financial markets or other external financing sources; weak or
declining consumer confidence, either generally or specifically
with respect to purchasing homes; competition for home sales from
other sellers of new and existing homes, including sellers of homes
obtained through foreclosures or short sales; weather conditions,
significant natural disasters and other environmental factors;
government actions, policies, programs and regulations directed at
or affecting the housing market (including, but not limited to, the
2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, tax
credits, tax incentives and/or subsidies for home purchases, tax
deductions for residential consumer mortgage interest payments and
property taxes, tax exemptions for profits on home sales, and
programs intended to modify existing mortgage loans and to prevent
mortgage foreclosures), the homebuilding industry, or construction
activities; the availability and cost of land in desirable areas;
our warranty claims experience with respect to homes previously
delivered and actual warranty costs incurred; legal or regulatory
proceedings or claims; our ability to access capital; our ability
to use/realize the net deferred tax assets we have generated; our
ability to successfully implement our current and planned product,
geographic and market positioning (including, but not limited to,
our efforts to expand our inventory base/pipeline with desirable
land positions or interests at reasonable cost and to expand our
community count and open new communities, and our increasing
operational and investment concentration in markets in California
and Texas), revenue growth and overhead and other cost reduction
strategies; consumer traffic to our new home communities and
consumer interest in our product designs; the impact of our former
unconsolidated mortgage banking joint venture ceasing to offer
mortgage banking services after June 30, 2011; the manner in which
our homebuyers are offered and obtain residential consumer mortgage
loans and mortgage banking services; our ability to establish a
joint venture or marketing relationship with a financial
institution or other mortgage banking services provider;
information technology failures and data security breaches; the
possibility that the offer and sale of the 2020 Senior Notes to
fund the purchase of the 2014/2015 Notes in the applicable tender
offers will not close timely or at all; the possibility that any or
all of the tender offers will be undersubscribed; and other events
outside of our control. Please see our periodic reports and other
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended November 30, 2011,
for a further discussion of these and other risks and uncertainties
applicable to our business.
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