Beazer Homes Announces Closing of Offering of $250 Million Senior Unsecured Notes due 2031

Rhea-AI Summary

Beazer Homes USA, Inc. (BZH) completes a $250 million offering of 7.500% Senior Unsecured Notes due 2031 to finance the repurchase of 6.750% Senior Notes due 2025.

Positive

• None.

Negative

• The offering of senior unsecured notes indicates a potential increase in debt for the company, which could lead to higher interest expenses in the future.

Insights

Financial Analyst

The recent announcement by Beazer Homes USA, Inc. about the completion of their $250 million offering of 7.500% Senior Unsecured Notes due 2031 is a significant financial maneuver. The company's strategic move to finance the repurchase of its 6.750% Senior Notes due 2025 before their maturity indicates a proactive approach to debt management. This decision to refinance existing debt could potentially reduce interest costs and extend the debt maturity profile, which is often viewed favorably by investors as it may improve the company's financial flexibility.

However, the higher interest rate on the new notes compared to the old ones might raise concerns about the company's cost of capital and its impact on future earnings. The use of any remaining proceeds for general corporate purposes is a common practice, but it lacks specificity and could lead to questions about the company's strategic priorities and operational plans. It is essential to monitor how this capital restructuring will affect the company's leverage ratios and overall financial health in the coming quarters.

Debt Market Analyst

Beazer Homes USA's issuance of the 7.500% Senior Unsecured Notes is a noteworthy event in the debt market, particularly due to the private offering nature and the exemption from the registration requirements of the Securities Act. The reliance on Rule 144A and Regulation S for the offering highlights a targeted approach towards qualified institutional buyers and non-U.S. persons, which is a common strategy for companies seeking to access capital without public registration.

The interest rate of 7.500% reflects the current market conditions and investor demand for corporate debt, especially considering the unsecured status of the notes, which typically commands a higher interest rate due to the increased risk. The successful completion of this offering suggests investor confidence in the company's creditworthiness, despite the inherent risks of unsecured debt. This transaction may also serve as a bellwether for similar issuances in the homebuilding industry and the broader unsecured debt market.

ATLANTA--(BUSINESS WIRE)-- Beazer Homes USA, Inc. (NYSE: BZH) (the “Company”) announced today the completion of its previously-announced offering of $250 million aggregate principal amount of 7.500% Senior Unsecured Notes due 2031 (the “Notes”). The Notes were offered in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

The net proceeds of the offering will be used to finance the repurchase of the Company’s 6.750% Senior Notes due 2025 (the “2025 Notes”), of which $197.9 million in aggregate principal amount is currently outstanding and which mature on March 15, 2025, with any remaining proceeds to be used for general corporate purposes.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes, nor does it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The offer and sale of the Notes will not be registered under the Securities Act or applicable state securities laws, and the Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act. Unless so registered, the Notes cannot be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Forward-Looking Statements

Statements contained in this release that state the Company’s or management’s intentions, expectations or predictions of the future are forward-looking statements. Specifically, the Company cannot assure you that the redemption of the 2025 Notes described above will be consummated on the terms currently contemplated, if at all. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. The Company disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future events or otherwise.

About Beazer Homes USA, Inc.

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in - saving you money every month. With Beazer’s Choice Plans™, you can personalize your primary living areas - giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240314135721/en/

Beazer Homes USA, Inc.

David I. Goldberg

Sr. Vice President & Chief Financial Officer

770-829-3700

investor.relations@beazer.com

Source: Beazer Homes USA, Inc.

FAQ

What is the ticker symbol for Beazer Homes USA, Inc. mentioned in the press release?

The ticker symbol for Beazer Homes USA, Inc. is BZH.

What is the purpose of the $250 million offering of 7.500% Senior Unsecured Notes due 2031?

The offering is to finance the repurchase of the Company's 6.750% Senior Notes due 2025.

How will the net proceeds from the offering be utilized?

The net proceeds will be used to finance the repurchase of the 2025 Notes, with any remaining proceeds allocated for general corporate purposes.

Under what conditions were the Notes offered?

The Notes were offered in a private offering exempt from the registration requirements of the Securities Act of 1933 to qualified institutional buyers under Rule 144A and outside the US to non-US persons in accordance with Regulation S.