KB Home (NYSE: KBH), one of the nation’s largest and most recognized homebuilders, today announced that it has agreed to sell an aggregate of 5.5 million shares of its common stock at a public offering price of $18.25 per share (or up to 6.325 million shares if the underwriters exercise their option to purchase additional shares) and $200 million in aggregate principal amount of its 1.375% convertible senior notes due 2019 (or up to $230 million in aggregate principal amount if the underwriters exercise their over-allotment option) in its previously announced concurrent underwritten public offerings.
The convertible senior notes will bear interest at a rate of 1.375% per year, payable semi-annually in arrears, and will mature in 2019, unless earlier purchased, redeemed or converted. The senior notes are convertible into shares of KB Home’s common stock at an initial conversion rate of 36.5297 shares per $1,000 principal amount of senior notes, which is equal to a conversion price of approximately $27.37 per share, subject to adjustment in certain circumstances. The convertible senior notes will be guaranteed on an unsecured senior 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 concurrent offerings to be approximately $289 million (assuming no exercise of the underwriters’ options), after deducting the underwriting discount and estimated offering expenses payable by KB Home. KB Home intends to use the net proceeds from both offerings for general corporate purposes, including without limitation land acquisition and development. The closing of both offerings is expected to occur on January 29, 2013, subject to the satisfaction of customary closing conditions.
The concurrent offerings are being made pursuant to an effective shelf registration statement that KB Home has on file with the Securities and Exchange Commission (“SEC”). The common stock offering and the convertible senior notes offering are being conducted as separate public offerings by means of separate prospectus supplements, and neither the common stock offering nor the convertible senior notes offering will be conditioned upon consummation of the other. For each offering, copies 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 Citigroup at the following address: c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by telephone at 1-800-831-9146 or by e-mail at firstname.lastname@example.org, or Credit Suisse at the following address: Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, e-mail: email@example.com or toll free at (800) 221-1037.This press release shall not constitute an offer to sell or the solicitation of an offer to buy these 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 concurrent offerings are being made only by means of their respective prospectus supplements and accompanying prospectus.