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Lennar Sells $200 MIL in Zero Coupons

MIAMI-The locally based homebuilder plans to use the proceeds to pay down revolving credit debt and for general corporate purposes.

By David R. Corder | Updated on April 02, 2001

MIAMI-Lennar Corp. has successfully placed $200 million in senior subordinated convertible debentures, yielding about 5.125%. New York-based Solomon Smith Barney is underwriting the debt placement, which will be used to pay down the locally based homebuilder’s revolving credit debt and for general corporate purposes.

Due to mature in 2021, each $1,000 of the principal amount on these zero-coupon debentures may be converted into 6.38 common shares at a 32% premium based on the price of Lennar’s publicly traded stock on the New York Stock Exchange as of the close of markets on March 29. Since the issue closed at $43.13, the debt holders may convert at a price of $56.93 on the fifth, 10th or 15th anniversary of the issue date plus the accrued yield.

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