KB Home Announces $100 Million Optional Redemption of 9.100% Senior Notes Due 2017
December 15 2016 - 6:30AM
Business Wire
KB Home (NYSE: KBH) today announced that it has elected to
exercise its optional redemption rights under the terms of its
9.100% Senior Notes due 2017 (“Notes”), which mature on September
15, 2017.
On January 13, 2017, KB Home will redeem $100 million in
aggregate principal amount of the Notes then outstanding at the
redemption price calculated according to the “make-whole”
provisions of the Notes, as outlined in the redemption notice
issued by U.S. Bank National Association, the trustee for the
Notes.
“Our strategy of growing scale in our served markets, and
increasing our operating profits, positions us to generate the cash
to support both our future growth and a reduction of our debt
balance. The early redemption of $100 million of our 2017 senior
notes – our most expensive debt – with internally generated cash
reinforces this point and represents an initial step toward
deleveraging,” said Jeffrey Mezger, chairman, president and chief
executive officer.
“At our investor conference in October, we shared a roadmap for
accelerating profitable growth, increasing return on invested
capital, and improving our net debt-to-capital ratio to between 40%
and 50% by 2019. We are making progress toward our objectives with
a balanced approach to capital allocation, as we work to deliver
higher stockholder value,” concluded Mezger.
About KB Home
KB Home (NYSE: KBH) is one of the largest and most recognized
homebuilders in the United States and an industry leader in
sustainability, building innovative and highly energy- and
water-efficient new homes. Founded in 1957 and the first
homebuilder listed on the New York Stock Exchange, the Company has
built nearly 600,000 homes for families from coast to coast.
Distinguished by its personalized homebuilding approach, KB Home
lets each buyer choose their lot location, floor plan, décor
choices, design features and other special touches that matter most
to them. To learn more about KB Home, call 888-KB-HOMES, visit
www.kbhome.com or connect on Facebook.com/KBHome or
Twitter.com/KBHome.
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 the
following: general economic, employment and business conditions;
population growth, household formations and demographic trends;
conditions in the capital, credit and financial markets; our
ability to access external financing sources and raise capital
through the issuance of common stock, debt or other securities,
and/or project financing, on favorable terms; material and trade
costs and availability; changes in interest rates; our debt level,
including our ratio of debt to capital, and our ability to adjust
our debt level and maturity schedule; our compliance with the terms
of our revolving credit facility; volatility in the market price of
our common stock; weak or declining consumer confidence, either
generally or specifically with respect to purchasing homes;
competition from other sellers of new and resale homes; weather
events, significant natural disasters and other climate and
environmental factors, including the severe prolonged drought and
related water-constrained conditions in the southwest United States
and California; government actions, policies, programs and
regulations directed at or affecting the housing market (including
the Dodd-Frank Act, tax benefits associated with purchasing and
owning a home, and the standards, fees and size limits applicable
to the purchase or insuring of mortgage loans by
government-sponsored enterprises and government agencies), 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; costs and/or charges arising from regulatory
compliance requirements or from legal, arbitral or regulatory
proceedings, investigations, claims or settlements, including
unfavorable outcomes in any such matters resulting in actual or
potential monetary damage awards, penalties, fines or other direct
or indirect payments, or injunctions, consent decrees or other
voluntary or involuntary restrictions or adjustments to our
business operations or practices that are beyond our current
expectations and/or accruals; our ability to use/realize the net
deferred tax assets we have generated; our ability to successfully
implement our current and planned strategies and initiatives
related to our product, geographic and market positioning
(including our plans to transition out of the Metro Washington,
D.C. area); gaining share and scale in our served markets; our
operational and investment concentration in markets in California;
consumer interest in our new home communities and products,
particularly from first-time and first move-up homebuyers and
higher-income consumers; our ability to generate orders and convert
our backlog of orders to home deliveries and revenues, particularly
in key markets in California; our ability to successfully implement
our returns-focused growth strategy and achieve the associated
revenue, margin, profitability, cash flow, community reactivation,
land sales, business growth, asset efficiency, return on invested
capital, return on equity, net debt-to-capital ratio and other
financial and operational targets and objectives; the ability of
our homebuyers to obtain residential mortgage loans and mortgage
banking services; the performance of mortgage lenders to our
homebuyers; completing the wind-down of Home Community Mortgage as
planned, and the management of its assets and operations during the
wind-down process; whether we can establish and operate a joint
venture or other relationship with a mortgage banking services
provider; information technology failures and data security
breaches; 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20161215005210/en/
KB HomeJill Peters, Investor Relations
Contact310-893-7456investorrelations@kbhome.com
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