KB Home (KBH) Expands Credit Facility, Extends Maturities
Zacks Investment Research | Oct 09, 2019 11:12PM ET
KB Home (NYSE:KBH) recently announced an amendment to its revolving credit facility, increasing the borrowing capacity to $800 million from $500 million. Also, the maturity for the revolver is extended to October 2023 from July 2021.
Moreover, the borrowing capacity can be increased to $1 billion. This is subject to certain customary conditions.
Earlier in 2017, the company had announced an increase in the credit facility to $500 million from $275 million. Since then, the company witnessed strong execution of the Returns-Focused Growth Plan, and improved revenues, margins, earnings and debt-to-capital ratio.
Specifically, with this move, KB Home expects to enhance the flexibility of its capital structure, which will further allow it to productively deploy excess cash while meeting short-term capital needs.
These efforts boost its maturity profile and help it enjoy greater liquidity for day-to-day operations. Also, the move will boost the company’s existing cash flow. Notably, KB Home has made various strategic efforts like the execution of the Returns-Focused Growth Plan that is designed to drive profitability, return on invested capital, return on equity and leverage ratio.
Notably, on Aug 31, 2019, the company’s debt-to-capital ratio was 45.1%, which improved 460 basis points (bps) from Nov 30, 2018. In fiscal 2018, its return on equity had increased 440 bps to 14.4%. For fiscal 2019, it expects to generate 10-15% return on equity.
Although fiscal third-quarter earnings and revenues declined on a year-over-year basis, the company remains upbeat about improvement in fiscal fourth-quarter results.
Notably, shares of the company have gained 77.8% in the year-to-date period, comparing favorably with its Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.