KB Home Announces Upsize and Pricing of Senior Notes Due 2031

Rhea-AI Summary

KB Home (NYSE: KBH) has upsized its offering of senior notes to $390 million, an increase of $90 million. These notes, due in 2031, carry an interest rate of 4.00% and will be sold at a public offering price of 100.00%. After costs, the estimated net proceeds are approximately $385 million, intended primarily for the tender offer of its 7.000% Senior Notes due 2021. Closing of the offering is anticipated on June 9, 2021. Major financial institutions are involved as book-running managers for the offering.

Positive

• Upsized offering of senior notes to $390 million, increasing from the proposed $300 million.
• Attractively priced at an interest rate of 4.00%.

Negative

• The need to tender existing 7.000% Senior Notes due 2021 may indicate liquidity pressures.

KB Home (NYSE: KBH) today announced that it has upsized and priced an offering of $390 million in aggregate principal amount of its senior notes due 2031, representing an increase of $90 million in aggregate principal amount from the previously announced proposed offering size. The offering is being made under an existing shelf registration statement that KB Home previously filed with the Securities and Exchange Commission (“SEC”).

The senior notes due 2031 will bear interest at a rate of 4.00% per annum and will be issued at a public offering price of 100.00%. The senior notes will be guaranteed on an unsecured basis by certain of KB Home’s subsidiaries that have guaranteed KB Home’s outstanding senior notes.

KB Home estimates the aggregate net proceeds from the offering to be approximately $385 million, after deducting the underwriting discount and estimated offering expenses payable by KB Home. KB Home intends to use the net proceeds from the offering together with cash on hand, as needed, to purchase its 7.000% Senior Notes due 2021 tendered by holders and accepted by KB Home in its previously announced cash tender offer for such notes and, if it so elects at its option, the redemption or purchase at any time, or the payment in full at maturity, of any of the 7.000% Senior Notes due 2021 not purchased in the tender offer. KB Home intends to use any remaining net proceeds from the offering for general corporate purposes.

The closing of the offering is expected to occur on June 9, 2021, subject to the satisfaction of customary closing conditions. BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, BNP Paribas Securities Corp. and MUFG Securities Americas Inc. are acting as book-running managers for the offering.

A copy of the prospectus supplement and accompanying prospectus describing the offering, when available, may be obtained by visiting EDGAR on the SEC’s website at www.sec.gov or by contacting BofA Securities at the following address: BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, email: dg.prospectus_requests@bofa.com, or BNP PARIBAS at the following address: Attn: Syndicate Desk, 787 Seventh Avenue, New York, NY 10019, email: new.york.syndicate@bnpparibas.com or toll free at 1-800-854-5674, or Citigroup at the following address: c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, email: prospectusdept@citi.com or toll free at 1-800-831-9146, or Credit Suisse at the following address: Attn: Prospectus Department, 6933 Louis Stephens Drive, Morrisville, North Carolina 27560, 1-800-221-1037, email: usa.prospectus@credit-suisse.com, or Deutsche Bank Securities at the following address: Attn: Prospectus Group, 60 Wall Street, New York, NY 10005, email: prospectus.cpdg@db.com or toll free at 1-800-503-4611, or MUFG at the following address: Attn: Capital Markets Group, 1221 Avenue of the Americas, 6th Floor, New York, New York 10020 or toll free at 1-877-649-6848, or Wells Fargo Securities at the following address: Attn: WFS Customer Service, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402, email: wfscustomerservice@wellsfargo.com or toll free at 1-800-645-3751.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, including KB Home’s 7.000% Senior Notes due 2021, a notice of redemption for any securities, nor shall there be any sale of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The senior notes offering is being made only by means of the prospectus supplement and the accompanying prospectus. The tender offer is being made only by means of the offer to purchase and accompanying notice of guaranteed delivery.

About KB Home

KB Home is one of the largest and most recognized homebuilders in the United States and has been building quality homes for over 60 years. Today, KB Home operates in 45 markets across eight states, serving a wide array of buyer groups. What sets us apart is how we give our customers the ability to personalize their homes from homesites and floor plans to cabinets and countertops, at a price that fits their budget. We are the first builder to make every home we build ENERGY STAR® certified. In fact, we go beyond the EPA requirements by ensuring every ENERGY STAR certified KB home has been tested and verified by a third-party inspector to meet the EPA’s strict certification standards, which help to lower the cost of ownership and to make our new homes healthier and more comfortable than new ones without certification. We also work with our customers every step of the way, building strong personal relationships so they have a real partner in the homebuying process, and the experience is as simple and easy as possible.

Forward-Looking and Cautionary Statements

You are cautioned that certain statements contained or incorporated or deemed to be incorporated by reference in this prospectus supplement and the accompanying prospectus, as well as some statements by us in periodic press releases and other public disclosures and some oral stateme

FAQ

What is the aggregate principal amount of KB Home's senior notes offering?

KB Home has upsized its senior notes offering to $390 million.

What is the interest rate on KB Home's senior notes due 2031?

The senior notes due 2031 will bear an interest rate of 4.00%.

What are the net proceeds expected from KB Home's offering?

KB Home estimates net proceeds of approximately $385 million after expenses.

When is the expected closing date for KB Home's offering?

The closing of the offering is expected to occur on June 9, 2021.

Who are the book-running managers for KB Home's offering?

Book-running managers include BofA Securities, Citigroup, Credit Suisse, Deutsche Bank, and more.