Miami, FL-based Lennar Corporation (LEN) announced that it has priced senior notes worth $350 million due on 2019. The senior notes carry an interest rate of 4.50%. The company will pay semi-annual interest on May 15 and Nov 15, beginning May 15, 2015. The offering is expected to close on Nov 25.
Lennar intends to use $347 million of the net proceeds for the company’s working capital and other corporate expenditures. As of Aug 31, 2014, Lennar had homebuilding cash and cash equivalents of $542 million down compared with approximately $638 million as of May 31, 2014.
The company might have used the cash for short-term financing, such as expenses for land acquisition and development activities and other general operating needs. During the recently reported third quarter of 2014, Lennar purchased 5,400 home sites for $273 million.
Lennar has been strategically focusing on acquiring low-cost new home sites in well-positioned markets during the downturn, which has placed it well to meet the growing demand during market recovery, thus giving it a competitive edge over peers facing land availability constraints.
Lennar’s diligent land purchases and growing community count thus position it well to generate high returns in the future.
Lennar presently carries a Zacks Rank #2 (Buy).
Other Stock to Consider
Investors interested in the building sector can also stocks like Hovnanian Enterprises Inc. (HOV), NVR, Inc. (NVR) and Beazer Homes USA Inc. (BZH). While Hovnanian Enterprises sports a Zacks Rank #1 (Strong Buy), Beazer Homes and NVR carry a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment