By Rebecca Melvin
New York, Jan. 24 - KB Home priced an upsized $200 million of six-year convertibles at par to yield 1.375% with an initial conversion premium of 50%, according to a term sheet.
The registered offering has a $30 million greenshoe.
Initially, the deal was talked at $150 million in size with a $22.5 million greenshoe.
Pricing came at the rich end of talk, which was for a 1.375% to 1.875% coupon and a 45% to 50% premium.
Concurrently with the notes, the company sold $100.38 million of common stock, or 5.5 million shares at $18.25 per share.
Up to 6.325 million shares will be sold if underwriters exercise their option to purchase additional shares.
The notes were sold via Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch and Deutsche Bank Securities Inc. as joint bookrunners.
The notes are non-callable until Nov. 6, 2018. They will be net share settled, and they have change-of-control and dividend protection.
Holders can convert their notes into equity at any time prior to maturity.
Proceeds from the notes sale and a concurrent stock offering will be used for general corporate purposes, including land acquisitions and development.
KB Home is a Los Angeles-based homebuilder.
| Issuer: | KB Home
|
| Issue: | Convertible senior notes
|
| Amount: | $200 million, upsized from $150 million
|
| Greenshoe: | $30 million, upsized from $22.5 million
|
| Maturity: | Feb. 1, 2019
|
| Concurrent offering: | $100.38 million of common stock, or 55 million shares at $18.25 per share
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch, Deutsche Bank Securities Inc.
|
| Coupon: | 1.375%
|
| Price: | Par
|
| Yield: | 1.375%
|
| Conversion premium: | 50%
|
| Conversion price: | $27.37
|
| Conversion ratio: | 36.5297
|
| Calls: | Non-callable until Nov. 6, 2018
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | Jan. 23
|
| Settlement date: | Jan. 29
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: KBH
|
| Stock reference price: | $18.25
|
| Stock price: | $18.63 at close Jan. 23
|
| Market capitalization: | $1.43 billion
|
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