KB Home releases results of tender offers for three series of notes

By Toni Weeks

San Diego, Feb. 16 - KB Home announced the final results for its tender offers to purchase up to $100 million of its 5¾% senior notes due 2014 and up to $340 million, less the amount of 5¾% notes accepted, of its 5 7/8% senior notes due 2015 and 6¼% senior notes due 2015, combined.

As of 11:59 p.m. ET on Feb. 15, $56,304,000 of the 5¾% senior notes due 2014, $170,038,000 of the 5 7/8% notes and $201.05 million of the 6¼% notes were tendered.

Because the combined total of the tendered 5 7/8% notes and 6¼% notes, less the amount of the tendered 5¾% notes, exceeded the cap for the 2015 notes' tender offer, all of the tendered 2015 notes will be purchased on a pro rata basis. As a result, KB Home said it has accepted for purchase all $56,304,000 of the tendered 5¾% notes, $129,993,000 of the 5 7/8% notes and $153,703,000 of the 6¼% notes. Settlement was expected on Thursday.

As previously announced, the company originally had offered on Jan. 19 to purchase a combined total of up to $250 million of the three series of the notes, which included $250 million of 5¾% notes, $300 million of 5 7/8% notes and $450 million of 6¼% notes. The company upped the cap in its offer on Feb. 1.

For each $1,000 principal amount, KB Home paid $1,010 for the 5¾% notes and par for the other two series. The payouts included an early tender premium of $30.00 for each note tendered by the early tender premium deadline for that series, which was 11:59 p.m. ET on Feb. 15 for the 5¾% notes and 5 p.m. ET on Jan. 31 for the other two series. Holders also received accrued interest.

The financing was contingent on a minimum of $350 million principal amount of debt securities being tendered, which has been satisfied.

KB Home, a Los Angeles-based homebuilder, priced $350 million of notes due March 15, 2020 on Feb. 1.

Citigroup Global Markets, Inc. (800 558-3745 or 212 723-6106) and Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147) were the dealer managers for the tender offer. The information agent was Global Bondholder Services Corp. (866 540-1500 or 212 430-3774).

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