Wednesday, October 25, 2006

kb home / expansive standstill agreement with bondholders

trouble with liquidity....? :-)/ärger mit der liquidität.......?

first was this notice a week ago.
KB Home Disputes Purported Notice of Default Related to Its 6-1/4% Senior Notes Due 2015

KB Home Commences Consent Solicitation from Holders of Its Senior Notes

KB Home today announced that it is soliciting consents (the "Consent Solicitation") from the holders of its $1.65 billion of outstanding Senior Notes (the "Senior Notes") to approve a proposed amendment to the indenture governing the Senior Notes (the "Indenture") to allow the Company to file its Quarterly Report on Form 10-Q for its fiscal quarter ended August 31, 2006 a maximum of 60 days after the current deadline, as further described below

Holders of the Senior Notes are referred to the Company's Consent Solicitation Statement dated October 25, 2006 and the related Letter of Consent, which are being mailed to holders, for the detailed terms and conditions of the Consent Solicitation.

The Company is offering a consent fee of $7.50 in cash for each $1,000 principal amount of Senior Notes, subject to the terms of the Consent Solicitation. (i smell a little bit of panic here...)

just to remember.
latest 10q filing end of may 2006

cash and cash equivilant end of may 9.7 mio$
total debt may 2006 3.58 b$
end of may 416 mio$ outstanding of the 1.5b$ credit facility and 437 mio$ of outstanding letters of credit
debt to capital ratio 54,5%!

when you do the math the "consent fee" is 12.4 mio$.
i don´t know for sure if this really means that every outstanding note is impactet.

they should get the amount from the ceo that caused this delay.


Anonymous Anonymous said...

Great post. I'm not entirely sure why they're paying $7.50 per bond. Is it simply because they're going to be late filing their 10-Q??? If that's the case, why do you think they are filing late? Late filings are generally bad. Wonder what's going on behind the scenes.

Any insight you have is appreciated!!!



10:55 AM  
Anonymous Anonymous said...

I see now: they're delayed due to the option grant investigation... Thanks...


11:05 AM  
Blogger jmf said...

thanks vega.

it will interesting to see how this plays out or if this is only a one time event.

the stock doesn´t care today. everything else would have been a big surprise.....

11:12 AM  

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