PulteGroup begins three tender offers for up to $500 million of notes

By Angela McDaniels

Tacoma, Wash., Sept. 22 - PulteGroup, Inc. has begun tender offers to purchase up to $500 million principal amount of three series of its notes and three series of notes issued by subsidiary Centex Corp., according to a company news release.

The company is holding three separate offers. In the first one, it will purchase any and all of its $225,215,000 of 6¼% notes due 2013 and Centex's $269,916,000 of 5 1/8% notes due 2013.

For each $1,000 principal amount, the purchase price is $1,060.00 for the 6¼% notes and $1,047.50 for the 5.125% notes.

The second offer is for PutleGroup's $463,996,000 of 5¼% notes due 2014 and Centex's $350 million 5.7% notes due 2014. It will purchase an amount of these notes equal to $500 million minus the amount of notes purchased in the first offer.

For each $1,000 principal amount, the purchase price is $1,025.00 for the 5¼% notes and $1,047.50 for the 5.7% notes.

Finally, the company is holding a Dutch auction tender offer for its $292,865,000 of 5.2% notes due 2015 and Centex's $450 million of 5¼% notes due 2015. It will purchase an amount of these notes equal to $500 million minus the amount of notes purchased in the first and second offers.

For each $1,000 principal amount, the bid price range is $965 to $995 for the 5.2% notes and $995 to $1,025 for the 5¼% notes.

Each of the purchase prices and bid prices noted above includes an early tender payment of $30.00 for notes tendered by 5 p.m. ET on Oct. 5, the early tender date.

The company will also pay accrued interest up to but excluding the settlement date.

The offers will expire at midnight ET on Oct. 20.

The amounts of notes purchased in the second and third offers may be prorated.

After 5 p.m. ET on Oct. 5, if all the conditions to the offer have been satisfied, the company can choose at any time to accept for payment all notes tendered in the first offer so far.

The tender offers will be funded from the company's available cash balance, which was $2.7 billion as of June 30.

The company noted that when it issued the 6¼% notes, 5¼% notes and 5.2% notes, it was known as Pulte Homes, Inc.

"Along with the $500 million in notes targeted by this tender, PulteGroup has over $500 million in additional bonds that will mature over the next 24 months. With no debt offerings currently anticipated, these expected paydowns will reduce outstanding debt by more than $1 billion," Roger A. Cregg, executive vice president and chief financial officer, said in the release.

"This tender is part of PulteGroup's overall capital allocation strategy, which seeks to balance the need for routine investment into the business with additional debt paydown and/or future dividends and stock repurchases.

"Given the company's strong cash balance, beyond these immediate plans for debt reduction, we will initiate a minimum $50 million per year stock repurchase program under our existing authorization, which has $102 million remaining."

The dealer managers are Barclays Capital Inc. (800 438-3242 or 212 528-7581), BNP Paribas Securities Corp. (888 210-4358 or 212 841-3059) and RBS Securities Inc. (877 297-9832 or 203 897-6145). D.F. King & Co., Inc. (212 269-5550 or 800 487-4870) is the information agent.

PulteGroup is a Bloomfield Hills, Mich.-based homebuilder.

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