New Issue: KB Home prices $350 million eight-year notes at par to yield 7¼%

By Paul A. Harris

Portland, Ore., June 7 – KB Home priced a $350 million issue of eight-year senior notes (Ba2/BB) at par to yield 7¼% in a Tuesday drive-by, according to market sources.

The execution saw the issue price coming rich to the 98 to 99 price talk. The yield printed at the wide end of the 7 1/8% to 7¼% yield talk. Initial guidance had the deal coming at a discount to yield in the high-6% area.

Left bookrunner Citigroup Global Markets Inc. will bill and deliver. Joint bookrunners were BofA Securities Inc., BNP Paribas Securities Corp., Fifth Third Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

The Los Angeles-based homebuilder plans to use the proceeds to refinance its 7½% senior notes due 2022.

Issuer:	KB Home
Amount:	$350 million
Issue:	Senior notes
Maturity:	July 15, 2030
Left bookrunner:	Citigroup Global Markets Inc. (bill and deliver)
Joint bookrunners:	BofA Securities Inc., BNP Paribas Securities Corp., Fifth Third Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC
Co-managers:	Citizens Capital Markets Inc., Regions Securities LLC, BMO Capital Markets Corp., MUFG, Zions First National Bank, CIBC World Markets Corp. and Texas Capital
Coupon:	7¼%
Price:	Par
Yield:	7¼%
Spread:	424 bps
First call:	July 15, 2025 at 103.625
Trade date:	June 7
Settlement date:	June 22
Ratings:	Moody's: Ba2
	S&P: BB
Distribution:	SEC registered
Price talk:	98 to 99 to yield 7 1/8% to 7¼%
Marketing:	Drive-by

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