KB Home plans to redeem $350 million 8% notes due 2020

By Wendy Van Sickle

Columbus, Ohio, Oct. 23 – KB Home said it will redeem all $350 million of its 8% senior notes due March 15 2020 using proceeds of its recent offering of 4.8% senior notes due 2029 and cash on hand.

“We expect a favorable impact to our gross margin in the future from a nearly $14 million reduction in annual interest incurred on our senior notes,” Jeffrey Mezger, chairman, president and chief executive officer of KB Homes, said in a news release announcing the redemption.

“In addition, we anticipate lowering our debt to capital ratio, as well as reducing the overall effective interest rate on our senior notes and more than doubling the weighted average remaining life of these notes.”

The notes will be redeemed in accordance with their indenture. U.S. Bank NA is the trustee.

KB Home is a Los Angeles-based homebuilder.

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