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.
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