KB Home (NYSE: KBH), one of the nation’s premier homebuilders, today
announced that it has upsized and priced an offering of $350 million in
aggregate principal amount of senior notes due 2022 (the “2022 Senior
Notes”). The size of the offering was increased to $350 million from the
previously announced $250 million. The notes will bear interest at 7.5%
per annum and be issued at a public offering price of 100% of their face
amount. The Company expects to close the 2022 Senior Notes offering on
July 31, 2012, subject to the satisfaction of customary closing
conditions.
KB Home also intends to upsize and amend certain terms of its previously
announced cash tender offers for its outstanding 5¾% Senior Notes due
2014 (the “2014 Notes”), and for its outstanding 5⅞% Senior Notes due
2015 and 6¼% Senior Notes due 2015 (the “2015 Notes”), and to use the
net proceeds from the offering of the 2022 Senior Notes to purchase
notes validly tendered in the applicable tender offers and accepted for
purchase. Any remaining net proceeds from the sale of the 2022 Senior
Notes will be used for general corporate purposes.
Citigroup, Credit Suisse and Deutsche Bank Securities are acting as
joint book-running managers for the 2022 Senior Notes offering. A shelf
registration statement covering the issuance of the 2022 Senior Notes
has been filed with the Securities and Exchange Commission (“SEC”) and
is effective. Copies of the prospectus supplement and accompanying
prospectus describing the offering may be obtained by visiting EDGAR on
the SEC’s website at www.sec.gov
or by contacting Citigroup at the following address: Brooklyn Army
Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220 or by
telephone at 1-877-858-5407 or by e-mail at batprospectusdept@citi.com.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any 2022 Senior Notes nor shall there be
any sale of 2022 Senior Notes 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
2022 Senior Notes offering is being made only by means of the prospectus
supplement and accompanying prospectus.
About KB Home
KB Home is one of the largest and most recognized homebuilding companies
in the United States. Since its founding in 1957, the Company has built
more than half a million quality homes. KB Home's signature Built to
Order™ approach lets each buyer customize their new home from lot
location to floor plan and design features. In addition to meeting
strict ENERGY STAR® guidelines, all KB homes are highly energy efficient
to help lower monthly utility costs for homeowners, which the Company
demonstrates with its proprietary KB Home Energy Performance Guide®
(EPG®). A leader in utilizing state-of-the-art sustainable
building practices, KB Home was named the #1 Green Homebuilder in the
most recent study by Calvert Investments and the #1 Homebuilder on
FORTUNE magazine’s 2011 World's Most Admired Companies list. Los
Angeles-based KB Home was the first homebuilder listed on the New York
Stock Exchange, and trades under the ticker symbol “KBH.” For more
information about KB Home's new home communities, call 888-KB-HOMES or
visit www.kbhome.com.
Forward-Looking and Cautionary Statements
Certain matters discussed in this press release, including any
statements that are predictive in nature or concern future market and
economic conditions, business and prospects, our future financial and
operational performance, or our future actions and their expected
results are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on current expectations and projections about
future events and are not guarantees of future performance. We do not
have a specific policy or intent of updating or revising forward-looking
statements. Actual events and results may differ materially from those
expressed or forecasted in forward-looking statements due to a number of
factors. The most important risk factors that could cause our actual
performance and future events and actions to differ materially from such
forward-looking statements include, but are not limited to: general
economic, employment and business conditions; adverse market conditions
that could result in additional impairments or land option contract
abandonment charges and operating losses, including an oversupply of
unsold homes, declining home prices and increased foreclosure and short
sale activity, among other things; conditions in the capital and credit
markets (including residential consumer mortgage lending standards, the
availability of residential consumer mortgage financing and mortgage
foreclosure rates); material prices and availability; labor costs and
availability; changes in interest rates; inflation; our debt level,
including our ratio of debt to total capital, and our ability to adjust
our debt level and structure and to access the credit, capital or other
financial markets or other external financing sources; weak or declining
consumer confidence, either generally or specifically with respect to
purchasing homes; competition for home sales from other sellers of new
and existing homes, including lenders and other sellers of homes
obtained through foreclosures or short sales; weather conditions,
significant natural disasters and other environmental factors;
government actions, policies, programs and regulations directed at or
affecting the housing market (including, but not limited to, the 2010
Dodd-Frank Wall Street Reform and Consumer Protection Act, tax credits,
tax incentives and/or subsidies for home purchases, tax deductions for
residential consumer mortgage interest payments and property taxes, tax
exemptions for profits on home sales, and programs intended to modify
existing mortgage loans and to prevent mortgage foreclosures), the
homebuilding industry, or construction activities; the availability and
cost of land in desirable areas; our warranty claims experience with
respect to homes previously delivered and actual warranty costs
incurred; our ability to obtain reimbursement and/or recoveries for the
costs incurred in connection with resolving claims and undertaking
repairs related to allegedly defective drywall material in homes
previously delivered and other warranty-related obligations; legal or
regulatory proceedings or claims; our ability to use/realize the net
deferred tax assets we have generated; our ability to successfully
implement our current and planned product, geographic and market
positioning (including, but not limited to, our efforts to expand our
inventory base/pipeline with desirable land positions or interests at
reasonable cost and to expand our community count, open new communities
for sales and sell higher-priced homes, and our increasing operational
and investment concentration in markets in California and Texas),
revenue growth, asset optimization, and overhead and other cost
reduction strategies and initiatives; consumer traffic to our new home
communities and consumer interest in our product designs; the manner in
which our homebuyers are offered and whether they are able to obtain
residential consumer mortgage loans and mortgage banking services,
including from our preferred mortgage lender, Nationstar; the
operational transition of our preferred mortgage lending relationship to
Nationstar and the performance of Nationstar with respect to that
relationship and in originating residential consumer mortgage loans for
our homebuyers; information technology failures and data security
breaches; the possibility that the offer and sale of the 2022 Senior
Notes to fund the purchase of the 2014 Notes and the 2015 Notes in the
applicable tender offers will not timely close, or at all; and other
events outside of our control. Please see our periodic reports and other
filings with the Securities and Exchange Commission for a further
discussion of these and other risks and uncertainties applicable to our
business.
