Beazer Homes amends, extends solicitation, ups consent fee for $1.53 billion of notes, convertibles

By Jennifer Chiou

New York, Oct. 23 - Beazer Homes USA, Inc. announced the extension of as well as other amendments to its consent solicitation for its $1.53 billion of senior notes and senior convertible notes.

The solicitation now ends at 5 p.m. ET on Friday, prolonged from Wednesday. It began on Oct. 15.

The Atlanta-based single-family homebuilder is soliciting consents to amend the note indentures to obtain a waiver for the requirement that it file forms, including 10-Qs, with the Securities and Exchange Commission.

The company is now also soliciting consents for an amendment to the definition of permitted liens that would restrict its ability to secure additional debt in excess of $700 million until it has four consecutive fiscal quarters with a consolidated fixed-charge coverage ratio of at least 2.0 to 1.0, after which time the limit will revert to the existing level of 40% of consolidated tangible assets.

Other amendments include changes to the definition of permitted investments that would enable the company to invest up to $50 million in joint ventures or unrestricted subsidiaries.

Previous amendments that are now withdrawn included a proposed covenant that would have obligated Beazer after May 15, 2008 to file reports with the SEC and deliver them to the trustees and holders and provided for additional interest of 50 basis points per year if Beazer failed to comply with the obligations on a timely basis.

For each $1,000 principal amount, the company is now offering a consent fee equal to the product of $12.50, up from $5.00, multiplied by a fraction, the numerator of which is the total principal amount of notes and the denominator of which is the amount of notes for which the company has accepted consents.

As previously disclosed, Beazer's has delayed filing its 10-Q for the period ended June 30 due to an independent internal investigation by the audit committee of the company's board.

On Oct. 11, the company said that the audit committee determined that it will be necessary for the company to restate its financial statements relating to fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007.

The restatement is also expected to impact the financial results for fiscal years 1999 through 2003 and Beazer said it expects that it will reflect the impact of financial results for these prior years as a part of the opening balances in the financial statements for the restatement period.

Beazer previously said that it does not believe it is in default under the note indentures.

MacKenzie Partners, Inc. (800 322-2885 or call collect 212 929-5500) is the information agent and tabulation agent. Citi (800 558-3745 or call collect 212 723-6106), Wachovia Securities (866 309-6316 or call collect 704 715-8341) and RBS Greenwich Capital (877 297-9832 or call collect 203 618-6145) are the solicitation agents.

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