Lennar Sells $350 Million of Bonds to Redeem Securities Due 2013

Lennar Corp. (LEN), the third-largest U.S. homebuilder by revenue, sold $350 million of notes to make a tender offer for debt coming due next year.

The company, which builds residences in 18 states, sold 4.75 percent bonds due December 2017 that yield 414 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The offering was originally sized at $300 million, according to a release today from the Miami, Florida- based company.

Proceeds will be used to redeem $267.7 million of 5.95 percent debentures due March 2013 at a price of 103 cents on the dollar and for general corporate purposes, the release said. The bonds increased to 103.1 cents on the dollar at 1:57 p.m. in New York today, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Lennar last issued bonds in November 2011, issuing $400 million of 3.25 percent convertible securities maturing in 2021 with a conversion price of $23.5 per share, according to Bloomberg data.

The new bonds were rated B2, the fifth-highest level of speculative grade, by Moody’s Investors Service, the ratings company said in a release today.

“While the transaction may result in a slight increase in Lennar’s debt levels, it extends the company’s debt maturity profile,” Moody’s said in the release. “We recognize the positive momentum the company has been demonstrating in terms of its operating performance and credit metrics.”

Deutsche Bank AG, Bank of America Corp. and UBS AG managed the sale, according to Bloomberg data.

Editors: John Parry, Richard Bravo

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net;

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net;

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