KB Home Announces Engagement of Citigroup for Proposed New Revolving Credit Facility
KB Home (NYSE: KBH), one of the nation’s largest and most recognized
homebuilders, today announced that it has engaged Citigroup Global
Markets Inc. (“CGMI”) to assemble a syndicate of financial institutions
to provide a new unsecured revolving credit facility in an initial
principal amount of up to $200 million, with an option to potentially
increase the principal amount to up to $300 million. CGMI has informed
KB Home that it has received commitments from several financial
institutions with respect to this credit facility, subject to execution
of satisfactory documentation. The definitive terms of, and the
obligations of KB Home, CGMI, and/or any members of the syndicate of
financial institutions to enter into, such a revolving credit facility
or any similar facility are subject to additional discussions and
negotiations among the parties, and there is no assurance that a new
revolving credit facility or similar facility for KB Home will be
consummated.
About KB Home
KB Home is one of the largest and most recognized homebuilding companies
in the United States. Since its founding in 1957, the company has built
more than half a million quality homes. KB Home’s signature Built to
Order™ approach lets each buyer customize their new home from lot
location to floor plan and design features. In addition to meeting
strict ENERGY STAR® guidelines, all KB homes are highly energy efficient
to help lower monthly utility costs for homeowners, which the company
demonstrates with its proprietary KB Home Energy Performance Guide®
(EPG®). A leader in utilizing state-of-the-art sustainable building
practices, KB Home was named the #1 Green Homebuilder in the most recent
study by Calvert Investments and the #1 Homebuilder on FORTUNE
magazine’s 2011 World’s Most Admired Companies list. Los Angeles-based
KB Home was the first homebuilder listed on the New York Stock Exchange,
and trades under the ticker symbol “KBH.” For more information about KB
Home’s new home communities, call 888-KB-HOMES or visit www.kbhome.com.
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; adverse
market conditions, including an increased supply of unsold homes,
declining home prices and greater foreclosure and short sale activity,
among other things, that could result in, among other negative impacts
on our consolidated financial statements, additional impairment or land
option contract abandonment charges, lower revenues and operating and
other losses; conditions in the capital, credit and financial markets
(including mortgage lending standards, the availability of mortgage
financing and mortgage foreclosure rates); material prices and
availability; labor costs and availability; changes in interest rates;
inflation; our debt level, including our ratio of debt to total capital,
and our ability to adjust our debt level, maturity schedule and
structure and to access the equity, credit, capital or other financial
markets or other external financing sources, including raising capital
through the public or private issuance of common stock, debt or other
securities, and/or obtaining a credit or similar facility or project
financing, on favorable terms; weak or declining consumer confidence,
either generally or specifically with respect to purchasing homes;
competition for home sales from other sellers of new and resale homes,
including lenders and other sellers of homes obtained through
foreclosures or short sales; weather conditions, significant natural
disasters and other environmental factors; government actions, policies,
programs and regulations directed at or affecting the housing market
(including, but not limited to, the 2010 Dodd-Frank Wall Street Reform
and Consumer Protection Act, tax credits, tax incentives and/or
subsidies for home purchases, tax deductions for mortgage interest
payments and property taxes, tax exemptions for profits on home sales,
and programs intended to modify existing mortgage loans and to prevent
mortgage foreclosures), the homebuilding industry, or construction
activities; decisions by lawmakers on federal fiscal policies, including
those relating to taxation and government spending; the availability and
cost of land in desirable areas; our warranty claims experience with
respect to homes previously delivered and actual warranty costs
incurred; legal or regulatory proceedings or claims; our ability to
use/realize the net deferred tax assets we have generated; our ability
to successfully implement our current and planned product, geographic
and market positioning (including, but not limited to, our efforts to
expand our inventory base/pipeline with desirable land positions or
interests at reasonable cost and to expand our community count, open
additional new home communities for sales and sell higher-priced homes
and more design options, and our operational and investment
concentration in markets in California and Texas), revenue growth, asset
optimization, asset activation, local field management and talent
investment, and overhead and other cost management strategies and
initiatives; consumer traffic to our new home communities and consumer
interest in our product designs and offerings, particularly
higher-income consumers; cancellations and our ability to realize our
backlog by converting net orders to home deliveries; our home sales and
delivery performance in key markets in California and Texas; the manner
in which our homebuyers are offered and whether they are able to obtain
mortgage loans and mortgage banking services, including from our
preferred mortgage lender, Nationstar Mortgage LLC; the performance of
Nationstar as our preferred mortgage lender; information technology
failures and data security breaches; the possibility that we, CGMI or
any members of the syndicate of financial institutions will not enter
into a revolving credit facility; the possibility that a new revolving
credit facility will not be available in an amount or on terms that are
acceptable to KB Home, or at all, and even if available, that KB Home
will not enter into such a facility or any similar facility; and other
events outside of our control. Please see our periodic reports and other
filings with the SEC for a further discussion of these and other risks
and uncertainties applicable to our business.