KB Home increases tender offer; holders tender $243.4 million so far

By Angela McDaniels

Tacoma, Wash., July 24 - KB Home changed some of the terms of the tender offers for its $193,696,000 of outstanding 5¾% senior notes due 2014, $170,007,000 of outstanding 5 7/8% senior notes due 2015 and $296,297,000 of outstanding 6¼% senior notes due 2015.

The company is offering to purchase any and all of the 5¾% notes and up to $240 million, less the amount of 5¾% notes accepted for purchase, of the other two series of notes on an equal-priority basis.

Originally, the cap on the two series of notes due 2015 was $150 million.

In addition, KB Home changed the tender offer for the 5¾% notes so that all holders who tender by the offer expiration will receive the early tender premium of $30.00 per $1,000 principal amount of notes. Previously, only holders who tendered by the early tender deadline would have received this premium.

Holders will receive $1,040 for each $1,000 principal amount of 5¾% notes.

The early tender premium deadline was not extended for the other two series of notes. The company will pay $1,020 for each $1,000 principal amount of these notes tendered by the early deadline, which includes a $30.00 early tender premium. For notes tendered after the early deadline, the payout will be $990.

In all cases, the company will also pay accrued interest.

Finally, the minimum size of the financing condition was increased. The tender offers are now conditioned on KB Home selling at least $350 million principal amount of debt securities.

The tender offer began July 11 and will end at 11:59 p.m. ET on Aug. 7. The early tender date was 5 p.m. ET on July 23.

Holders had tendered $243,395,000 of the notes as of the early tender date including $117,551,000 of 5¾% notes, $66,788,000 of 5 7/8% notes and $59,056,000 of 6¼% notes.

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

KB Home is a Los Angeles-based homebuilder.

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