New Issue: KB Home prices upsized $350 million 8% eight-year notes at 98.523 to yield 8¼%

By Paul A. Harris

Portland, Ore., Feb. 1 - KB Home priced an upsized $350 million issue of 8% eight-year senior notes (B2/B+/B+) at 98.523 to yield 8¼% on Wednesday, according to an informed source.

The deal was launched at 8¼% earlier in the Wednesday session.

Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Deutsche Bank Securities Inc. were the joint bookrunners for the issue, which was upsized from $250 million.

The Los Angeles-based homebuilder plans to use the proceeds to fund tender offers for its outstanding 5¾% senior notes due 2014 and of its 5⅞% senior notes due 2015 and 6¼% senior notes due 2015, with any remaining to be used for general corporate purposes.

Issuer:	KB Home
Face amount:	$350 million, increased from $250 million
Proceeds:	$344,831,000
Maturity:	March 15, 2020
Securities:	Senior notes
Left bookrunner:	Citigroup Global Markets Inc.
Joint bookrunners:	Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Deutsche Bank Securities Inc.
Co-manager:	Wells Fargo Securities LLC
Coupon:	8%
Price:	98.523
Yield:	8¼%
Spread:	640 bps
Call protection:	Non-callable
Make-whole:	Treasuries plus 50 bps
Change-of-control put:	101%
Trade date:	Feb. 1
Settlement date:	Feb. 7
Ratings:	Moody's: B2
	Standard & Poor's: B+
	Fitch: B+
Distribution:	SEC registered
Launched:	8¼%
Marketing:	Quick to market

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