) recently increased the limit under its unsecured revolving
credit facility to $950 million. The company also extended its
maturity to Jun 2017. The revised credit facility will
improve the company's liquidity position and contribute toward
its long-term growth. The company previously had a credit
facility of $525 million.
Earlier, on Apr 10, Lennar 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 were 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 load remains high. Net homebuilding
debt amounted to $3.39 billion as of Feb 28, 2013 versus $2.86
billion as of Nov 30, 2012, reflecting 370 basis points increase
in net debt-to-capitalization ratio of 49.3%. Lennar had cash and
cash equivalents of $1.11 billion from its homebuilding
operations as of Feb 28, 2013 compared with $1.15 billion as of
Nov 30, 2012.
Lennar carries a Zacks Rank #3 (Hold).
Other stocks in the homebuilding sector that are performing
well and deserve a mention include
D. R. Horton Inc.
Ryland Group Inc.
), both carrying a Zacks Rank #1 (Strong Buy), and
MDC Holdings Inc.
) carrying a Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
MDC HLDGS (MDC): Free Stock Analysis Report
RYLAND GRP INC (RYL): Free Stock Analysis
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