KB Home (NYSE: KBH), one of the nation’s largest homebuilders,
today announced that it has priced its previously announced
offering of $300.0 million in aggregate principal amount of its
senior notes due 2029.
The senior notes due 2029 will bear interest at a rate of 4.80%
per annum and will be issued at a public offering price of 100.00%.
The senior notes will be guaranteed on an unsecured basis by
certain of KB Home’s subsidiaries that have guaranteed KB Home’s
outstanding senior notes.
KB Home estimates the aggregate net proceeds from the senior
notes offering to be approximately $296.2 million, after deducting
the underwriting discount and estimated offering expenses payable
by KB Home. KB Home intends to use the net proceeds towards the
retirement of its 8.00% Senior Notes due 2020, by redemption at the
optional redemption terms specified for such notes, purchase or
repayment at maturity.
The closing of the senior notes offering is expected to occur on
November 4, 2019, subject to the satisfaction of customary closing
conditions. Citigroup Global Markets Inc., BNP Paribas Securities
Corp., BofA Securities, Inc., Credit Suisse Securities (USA) LLC,
Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC are
acting as book-running managers for the senior notes offering.
The senior notes offering is being made pursuant to an effective
shelf registration statement that KB Home has on file with the
Securities and Exchange Commission (“SEC”). A copy of the
prospectus supplement and accompanying prospectus describing the
senior notes offering, when available, may be obtained by visiting
EDGAR on the SEC’s website at www.sec.gov or by contacting
Citigroup at the following address: c/o Broadridge Financial
Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, email:
prospectusdept@citi.com or toll free at 1-800-831-9146, or BNP
PARIBAS at the following address: Attn: Syndicate Desk, 787 Seventh
Avenue, New York, NY 10019, email:
new.york.syndicate@bnpparibas.com or toll free at 1-800-854-5674,
or BofA Securities at the following address: BofA Securities,
NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC
28255-0001, Attn: Prospectus Department, email:
dg.prospectus_requests@bofa.com, or Credit Suisse at the following
address: Attention: Prospectus Department, One Madison Avenue, New
York, NY 10010, email: newyork.prospectus@credit-suisse.com, or
Deutsche Bank Securities at the following address: Attn: Prospectus
Group, 60 Wall Street, New York, NY 10005, email:
prospectus.CPDG@db.com or toll free at 1-800-503-4611, or Wells
Fargo Securities at the following address: Attn: WFS Customer
Service, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402,
email: wfscustomerservice@wellsfargo.com or toll free at
1-800-645-3751.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of such securities 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 senior notes offering is being made only by means
of the prospectus supplement and the accompanying prospectus.
About KB Home
KB Home (NYSE: KBH) is one of the largest and most recognized
homebuilders in the United States and has been building quality
homes for over 60 years. Today, KB Home operates in 38 markets
across eight states, serving a wide array of buyer groups. What
sets us apart is giving our customers the ability to personalize
their homes from homesites and floor plans to cabinets and
countertops, at a price that fits their needs. And as the first
builder ever to make every home we build ENERGY STAR® certified, KB
Home is able to not only design thoughtful living spaces but ones
that lower the cost of homeownership. We also work with our
customers every step of the way, building strong personal
relationships so they have a real partner in the homebuying process
and the experience is as simple and easy as possible.
Forward-Looking and Cautionary Statements
Certain matters discussed in this press release, including any
statements that are predictive in nature, depend upon or refer to
future events or conditions, include words such as “intends” and
similar expressions, or concern future market and economic
conditions, ongoing business strategies and prospects, our future
financial and operational performance, future debt issuances,
repurchases, or redemptions, 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 our current expectations
and projections about future events and are subject to risks,
uncertainties, and assumptions about our operations, economic and
market factors, and the homebuilding industry, among other things.
These statements are not guarantees of future performance, and we
have no specific policy or intention to update these 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 the following: general economic, employment and
business conditions; population growth, household formations and
demographic trends; conditions in the capital, credit and financial
markets; our ability to access external financing sources and raise
capital through the issuance of common stock, debt or other
securities, and/or project financing, on favorable terms; the
execution of any share repurchases pursuant to our board of
directors’ authorization; material and trade costs and
availability; changes in interest rates; our debt level, including
our ratio of debt to capital, and our ability to adjust our debt
level and maturity schedule; our compliance with the terms of our
revolving credit facility; volatility in the market price of our
common stock; weak or declining consumer confidence, either
generally or specifically with respect to purchasing homes;
competition from other sellers of new and resale homes; weather
events, significant natural disasters and other climate and
environmental factors; any failure of lawmakers to agree on a
budget or appropriation legislation to fund the federal
government’s operations, and financial markets’ and businesses’
reactions to that failure; government actions, policies, programs
and regulations directed at or affecting the housing market
(including the Tax Cuts and Jobs Act (the “TCJA”), the Dodd-Frank
Act, tax benefits associated with purchasing and owning a home, and
the standards, fees and size limits applicable to the purchase or
insuring of mortgage loans by government-sponsored enterprises and
government agencies), the homebuilding industry, or construction
activities; changes in existing tax laws or enacted corporate
income tax rates, including those resulting from regulatory
guidance and interpretations issued with respect to the TCJA;
changes in U.S. trade policies, including the imposition of tariffs
and duties on homebuilding materials and products, and related
trade disputes with and retaliatory measures taken by other
countries; the adoption of new or amended financial accounting
standards, including revenue recognition (ASC 606) and lease
accounting standards (ASC 842), and the guidance and/or
interpretations with respect thereto; the availability and cost of
land in desirable areas and our ability to timely develop acquired
land parcels and open new home communities; our warranty claims
experience with respect to homes previously delivered and actual
warranty costs incurred; costs and/or charges arising from
regulatory compliance requirements or from legal, arbitral or
regulatory proceedings, investigations, claims or settlements,
including unfavorable outcomes in any such matters resulting in
actual or potential monetary damage awards, penalties, fines or
other direct or indirect payments, or injunctions, consent decrees
or other voluntary or involuntary restrictions or adjustments to
our business operations or practices that are beyond our current
expectations and/or accruals; our ability to use/realize the net
deferred tax assets we have generated; our ability to successfully
implement our current and planned strategies and initiatives
related to our product, geographic and market positioning, gaining
share and scale in our served markets and entering into new
markets; our operational and investment concentration in markets in
California; consumer interest in our new home communities and
products, particularly from first-time homebuyers and higher-income
consumers; our ability to generate orders and convert our backlog
of orders to home deliveries and revenues, particularly in key
markets in California; our ability to successfully implement our
returns-focused growth plan and achieve the associated revenue,
margin, profitability, cash flow, community reactivation, land
sales, business growth, asset efficiency, return on invested
capital, return on equity, net debt to capital ratio and other
financial and operational targets and objectives; income tax
expense volatility related to stock-based compensation; the ability
of our homebuyers to obtain residential mortgage loans and mortgage
banking services; the performance of mortgage lenders to our
homebuyers; the performance of KBHS Home Loans, LLC, our mortgage
banking joint venture with Stearns Ventures, LLC (“Stearns”); the
process and outcome of the voluntary bankruptcy filing involving
Stearns; information technology failures and data security
breaches; the possibility that the proposed offering of the senior
notes will not close timely, or at all; and other events outside of
our control. Please see our Annual Report on Form 10-K for the
fiscal year ended November 30, 2018, our subsequent quarterly
reports on Form 10-Q and our other filings with the SEC for a
further discussion of these and other risks and uncertainties
applicable to our business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191021005879/en/
Jill Peters, Investor Relations Contact (310) 893-7456 or
investorrelations@kbhome.com
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