Meritage Homes tenders for 7% notes, up to $65 million 6¼% notes

By Angela McDaniels

Tacoma, Wash., April 6 - Meritage Homes Corp. has begun tender offers to purchase up to $195 million principal amount of two series of notes, according to a company news release.

In the first offer, the company is offering to purchase any and all of its $130 million of 7% senior notes due May 1, 2014.

In the second offer, the company is offering to purchase up to $65 million of its $350 million of 6¼% senior notes due 2015 in a modified Dutch auction.

For each $1,000 principal amount, the purchase price is $1,025 for the 7% notes and the acceptable bid range for the 6¼% notes is $960 to $1,000. These prices include an early tender premium of $20.00 for each note tendered by midnight ET on April 19.

Holders will also receive accrued interest up to but excluding the settlement date.

Under the modified Dutch auction procedure, Meritage will accept tendered notes in the order of the lowest to the highest tender prices specified by the tendering holders (in increments of $1.25) and will select the single lowest price that will allow it to purchase an amount of notes equal to the tender cap or, if less than the tender cap are tendered, all notes tendered .

If the amount of notes tendered at or below the selected purchase price exceeds the tender cap, Meritage will first accept for purchase all notes tendered at prices below the purchase price and then notes tendered at the purchase price on a prorated basis.

The offers will expire at midnight ET on May 3.

The offers are conditioned on the completion by Meritage of a private offering of at least $200 million principal amount of unsecured senior debt securities that closes no later than April 19.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106, Attn. liability management group) and J.P. Morgan Securities Inc. are the dealer managers. Global Bondholder Services Corp. (866 804-2200 or 212 430-3774) is the depositary and information agent.

Meritage is a homebuilder based in Scottsdale, Ariz.

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