New Issue: KB Homes $250 million seven-year notes yield 8%

By Paul A. Harris

St. Louis, Jan. 17 - KB Homes priced an off-the-shelf offering of $250 million 7¾% senior subordinated notes due Feb. 1, 2010 (Ba3/BB-) Friday at 98.676 to yield 8%, according to a syndicate source.

Price talk was for a yield in the 8% area.

UBS Warburg was the bookrunner. Banc One Capital Markets and Credit Lyonnais were co-managers.

Proceeds will be used to repay debt including $125 million of 9 5/8% senior subordinated notes due 2006 and for general corporate purposes.

The issuer is a single-family homebuilder headquartered in Los Angeles.

Issuer:	KB Homes
Amount:	$250 million
Maturity:	Feb. 1, 2010
Security description:	Senior subordinated notes
Manager:	UBS Warburg
Co-managers:	Banc One Capital Markets, Credit Lyonnais
Coupon:	7¾%
Price:	98.676
Yield:	8%
Spead:	439 basis points
Call features:	Callable on Feb. 1, 2007 at 103.875, 101.938, par on Feb. 1, 2009 and thereafter
Equity clawback:	Until Feb. 1, 2006 for up to 35% at 107.75
Settlement date:	Jan. 27, 2003 (T+5)
Ratings:	Moody's: Ba3
	Standard & Poor's: BB-
Cusip:	48666KAF6
Price talk:	8% area

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