There has been a relative increase in builder debt issuance this week and more may be on the way.
Fitch has rated two senior note deals by builders it follows this week: a BBB-minus rated $300 million Toll Brothers transaction with notes due in 2022, and a B-plus rated $250 million KB Home senior note deal with notes due in 2020.
“Other builders may come to market during the next few months with the typical size of such deals likely to range between $200-250 million, though upsize potential is possible,” Bob Curran, managing director, lead homebuilding analyst at Fitch told this publication. “The homebuilders are being opportunistic coming to market now.”
Fitch has rated just one other debt deal done by builders that it follows since mid-2011: a $350 million Lennar issuance of 3.25% convertible senior notes due 2021 last November, subsequent to which the company issued an additional $5 million to cover over-allotments.