Forestar talks $300 million five-year notes to yield 7¾% to 8%, timing moved up, pricing Friday

By Paul A. Harris

Portland, Ore., April 5 – Forestar Group Inc. talked its $300 million offering of five-year senior notes (B2/B) to yield 7¾% to 8%, according to market sources.

There are also covenant changes bearing primarily upon how the company may disburse cash and incur additional debt.

Official talk comes tight to initial guidance in the 8% area.

Deal timing accelerated. Books close at 1 p.m. ET on Friday, and the notes are expected to price thereafter. When launched, Forestar's deal was expected to remain in the market into the April 8 week.

J.P. Morgan Securities LLC is the lead.

The notes come with two years of call protection.

The Austin, Texas-based land developer, which is 75% owned by D.R. Horton, Inc., plans to use the proceeds for general corporate purposes including land acquisition and development and debt repayment.

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