KB Home announces cash tender offers for senior notes due 2014 and 2015 of up to US$250M

LOS ANGELES , January 20, 2012 (press release) – KB Home (NYSE: KBH), one of the nation’s premier homebuilders, today announced the commencement of cash tender offers for up to $250 million in aggregate principal amount of its 5¾% Senior Notes due 2014 (the “2014 Notes”) and of its 5⅞% Senior Notes due 2015 and 6¼% Senior Notes due 2015 (the “2015 Notes”).

The tender offers are being made pursuant to an Offer to Purchase dated January 19, 2012 and a related Letter of Transmittal, which set forth a more detailed description of the tender offers.

Upon the terms and subject to the conditions described in the Offer to Purchase, the Letter of Transmittal and any amendments or supplements to the foregoing, KB Home offers to purchase for cash up to $100 million in aggregate principal amount (the “Maximum 2014 Amount”) of the 2014 Notes (the “2014 Note Tender Offer”), and up to $250 million in aggregate principal amount, less any amount accepted in the 2014 Note Tender Offer, of the 2015 Notes (the “Maximum 2015 Amount” and, together with the Maximum 2014 Amount, the “Maximum Tender Amounts”). KB Home reserves the right to increase or waive either or both of the Maximum Tender Amounts subject to compliance with applicable law.

These offers (the “Tender Offers”) will expire at 11:59 p.m., New York City time, on February 15, 2012, unless extended or earlier terminated (the “Expiration Date”).

 

   

 

   

 

   

 

   

Dollars per $1,000 Principal
Amount of Securities

 

Title of Security

   

CUSIP

Number

   

Principal

Amount

Outstanding

   

Acceptance
Priority Level

   

Tender Offer

Consideration

   

Early

Tender

Premium

   

Total

Consideration (a)

2014 Note Tender Offer

                                   
5¾% Senior Notes due 2014     48666KAH2     $ 250,000,000     1    

$980.00

    $30.00    

$1,010.00

2015 Note Tender Offers

                                   
5⅞% Senior Notes due 2015     48666KAL3     $ 300,000,000    

2

   

$970.00

    $30.00    

$1,000.00

6¼% Senior Notes due 2015     48666KAM1     $ 450,000,000     2    

$970.00

    $30.00    

$1,000.00

 
(a) The Total Consideration includes the Early Tender Premium and is payable only to holders of the 2014 Notes or the 2015 Notes, as the case may be, that are validly tendered (and not validly withdrawn) on or prior to 5:00 p.m., New York City time, on January 31, 2012 (the “Early Tender Date”), and accepted for purchase.


KB Home’s obligation to accept for purchase and to pay for the 2014 Notes or the 2015 Notes validly tendered in the applicable Tender Offer is subject to the satisfaction or waiver of a number of conditions, including its completion of a proposed offer and sale of unsecured senior debt securities on terms reasonably satisfactory to the Company. None of the Tender Offers is contingent upon the tender of any minimum amount of the 2014 Notes or the 2015 Notes, as applicable. KB Home reserves the right to waive any one or more of the conditions at any time; to keep any of the Tender Offers open or to extend the Early Tender Date (as defined in the table above) or the Expiration Date, as applicable, for any of the Tender Offers; or to the extent any of the conditions are not satisfied, to terminate or otherwise amend any of the Tender Offers.

The consideration for each $1,000 principal amount of the 2014 Notes or the 2015 Notes, as the case may be, validly tendered and accepted for purchase pursuant to the applicable Tender Offer will be the consideration set forth in the table above under “Tender Offer Consideration” for the applicable series. Holders of the 2014 Notes or the 2015 Notes, as the case may be, that are validly tendered on or prior to the applicable Early Tender Date and accepted for purchase pursuant to the applicable Tender Offer will receive the applicable Tender Offer Consideration plus the amount set forth in the table above under “Early Tender Premium” for the applicable series. Holders of the 2014 Notes or the 2015 Notes, as the case may be, that are validly tendered after the applicable Early Tender Date, but on or prior to the applicable Expiration Date and accepted for purchase pursuant to the applicable Tender Offer will receive the applicable Tender Offer Consideration, but not the applicable Early Tender Premium, for the applicable series.

If all of the conditions to the Tender Offers are satisfied or waived by KB Home, KB Home expects to accept the 2014 Notes or the 2015 Notes, as the case may be, for purchase pursuant to the applicable Tender Offer, and for the applicable “Settlement Date” to occur, promptly following the applicable Expiration Date.

Payments for the 2014 Notes or the 2015 Notes purchased pursuant to the applicable Tender Offer will include accrued and unpaid interest from and including the last interest payment date up to, but not including, the applicable Settlement Date.

If the aggregate principal amount of the 2014 Notes or the 2015 Notes, as the case may be, validly tendered exceeds the applicable Maximum Tender Amount, KB Home will accept for purchase 2014 Notes or 2015 Notes, in each case on a prorated basis, as described in the Offer to Purchase and the related Letter of Transmittal.

Tenders of the 2014 Notes or the 2015 Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on January 31, 2012, but may not be withdrawn thereafter, unless the applicable withdrawal deadline is extended by the Company.

KB Home has retained Citigroup Global Markets, Inc. and Credit Suisse Securities (USA) LLC to serve as dealer managers for the Tender Offers. Global Bondholder Services Corporation has been retained to serve as the depositary and information agent.

For additional information regarding the terms of the Tender Offers, please contact Citigroup Global Markets, Inc. at (800) 558-3745 (toll free) or (212) 723-6106 (collect), or Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) or (212) 538-2147 (collect). Requests for documents and questions regarding the tender of the 2014 Notes or the 2015 Notes may be directed to Global Bondholder Services Corporation at (866) 540-1500 (toll free) or (212) 430-3774 (collect).

The Offer to Purchase and the related Letter of Transmittal are expected to be distributed to holders beginning today. Copies of the Offer to Purchase and the Letter of Transmittal may also be obtained at no charge from Global Bondholder Services Corporation.

None of KB Home, its board of directors, the depositary and information agent, the dealer managers or the trustee with respect to the 2014 Notes or the 2015 Notes makes any recommendation as to whether holders of the 2014 Notes or the 2015 Notes, as the case may be, should tender or refrain from tendering all or any portion of the principal amount of such senior notes.

This announcement does not constitute an offer to buy or the solicitation of an offer to sell securities. The Tender Offers are being made solely by means of the Offer to Purchase and the related Letter of Transmittal. In those jurisdictions where the securities, blue sky or other laws require any Tender Offer to be made by a licensed broker or dealer, such Tender Offer will be deemed to be made on behalf of KB Home by the dealer managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

About KB Home

KB Home (NYSE: KBH), one of the nation’s premier homebuilders, has delivered over half a million quality homes for families since its founding in 1957. The Los Angeles-based company is distinguished by its Built to Order™ homebuilding approach that puts a custom home experience within reach of its customers at an affordable price. KB Home has been named the #1 Green Homebuilder in a study by Calvert Investments and the #1 Homebuilder on FORTUNE magazine’s 2011 World’s Most Admired Companies list. The Company trades under the ticker symbol “KBH” and was the first homebuilder listed on the New York Stock Exchange. For more information about any of KB Home's new home communities, call 888-KB-HOMES or visit www.kbhome.com.

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