KB Home Raises $450 Million in Bond Issue to Fund Tender Offer

KB Home (KBH), the Los Angeles-based homebuilder that announced a tender offer for as much as $215 million of its bonds today, issued $450 million of notes to help retire the debt.

The company sold 7 percent securities due December 2021 to yield 460 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The debt is rated B2 by Moody’s Investors Service, an equivalent B at Standard & Poor’s and B+, one level higher, by Fitch Ratings. The homebuilder initially marketed $350 million of notes.

Proceeds will be used to fund the tender offer and the redemption of any redeemable notes not purchased, KB Home said in a statement today.

The company offered to buy back its $76 million of 5.75 percent notes due February 2014 for as much as 101.39 cents on the dollar and $102.2 million of 5.875 percent debentures due January 2015 for as much as 106.6 cents, it said in a separate statement. KB Home also tendered for as much as $37 million of its $236.9 million of 6.25 percent bonds due June 2015 for as much as 107.5 cents.

KB Home last sold debt in January, issuing $230 million of 1.375 percent, six-year convertible debentures, Bloomberg data show.

Credit Suisse Group AG, Bank of America Corp., Citigroup Inc. and Deutsche Bank AG managed today’s offering, Bloomberg data show.

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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