) recently sold senior notes worth $50 million due on Nov 15,
2022 to initial purchasers, who in turn will resell the senior
notes to qualified institutional buyers. The senior notes, which
carry an interest rate of 4.75%, were sold at a price of 98.25%
and generated total outstanding principal amount of $575 million.
The principal amount is expected to be delivered and paid for on
Apr 17, 2013.
Prior to this, Lennar had sold its senior notes due 2022 worth
$175 million on Feb 4, 2013 and $350 million worth of notes on
Oct 23, 2012.
Lennar intends to use the net proceeds for working capital and
other corporate expenditures, which may include repurchase or
repayment of its other outstanding senior notes or any other
Most of the company's short-term financing, such as expenses for
land acquisition and development activities and other general
operating needs are met with cash generated from operations and
proceeds from debt issuances.
Lennar Corporation's debt position remains very weak. Net
homebuilding debt amounted to $3.39 billion as of Feb 28, 2013
versus $2.86 billion as of Nov 30, 2012, reflecting a 370 basis
point increase in net debt-to-capitalization ratio of 49.3%.
Lennar had cash and cash equivalents of $1.11 billion from
homebuilding as of Feb 28, 2013 compared with $1.15 billion as of
Nov 30, 2012.
However, Lennar beat the Zacks Consensus Estimate on both the
top and bottom lines in the first quarter of 2013. Home closings,
new orders and backlog were all up in double digits from the
year-ago period. The company expects to continue to achieve
further profitability in fiscal 2013 on the back of rising home
prices, strong liquidity position, solid backlog, strategic land
acquisitions and new community openings.
Lennar carries a Zacks Rank #2 (Buy).
Stocks in the homebuilding sector that are performing well and
deserve a mention include
Ryland Group Inc.
D. R. Horton Inc.
) carrying a Zacks Rank #1 (Strong Buy), and
Hovnanian Enterprises Inc.
) , carrying a Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
HOVNANIAN ENTRP (HOV): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
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