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Meritage Homes Announces Pricing of $500 Million of 5.650% Senior Notes Due 2035

1. Meritage Homes priced $500 million in 5.650% Senior Notes due 2035. 2. Proceeds from the offering will be used for general corporate purposes. 3. The offering is expected to close on March 6, 2025. 4. Meritage's debt management strategy could affect future financial stability. 5. Company faces risks from interest rates and labor costs impacting housing market.

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FAQ

Why Bullish?

The note issuance may enhance Meritage’s liquidity, facilitating growth amidst market challenges, similar to previous successful debt offerings that helped reduce costs. A robust balance sheet often translates to increased investor confidence.

How important is it?

The senior notes offering is a significant capital raising event, indicating Meritage's position to leverage debt for growth or stability, which is crucial for investors considering the evolving market landscape and interest rates.

Why Short Term?

The immediate influx of cash enhances operational flexibility, supporting near-term projects and mitigating risks from rising interest rates and commodity costs, akin to past scenarios where cash flow improvements stabilized stock prices.

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DHILENMTHPHMTOL
February 27, 2025 17:38 ET  | Source: Meritage Homes Corporation SCOTTSDALE, Ariz., Feb. 27, 2025 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH, “Meritage” or the “Company”) announced today that it has priced a registered underwritten public offering of $500 million aggregate principal amount of 5.650% Senior Notes due 2035 (the “senior notes”). The senior notes will pay interest semi-annually at a rate of 5.650% per year and will mature on March 15, 2035. The closing of the offering is expected to occur on March 6, 2025, subject to the satisfaction of customary closing conditions. Meritage intends to use the net proceeds of the offering for general corporate purposes. J.P. Morgan Securities LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, Fifth Third Securities, Inc., PNC Capital Markets LLC, Regions Securities LLC, Truist Securities, Inc. and U.S. Bancorp Investments, Inc. are acting as Joint Book-Running Managers in the transaction. TCBI Securities, Inc., Wedbush Securities Inc. and Comerica Securities, Inc. are acting as Joint Co-Managers. The offering is being made pursuant to an effective shelf registration statement that Meritage has filed with the Securities and Exchange Commission (the “SEC”) (File No. 333-279002) and only by means of a prospectus supplement and accompanying prospectus, copies of which may be obtained free of charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, copies of the prospectus supplement and accompanying prospectus may be obtained by contacting J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by emailing prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; by contacting BofA Securities, Inc. at 1-800-294-1322, or by emailing dg.prospectus_requests@bofa.com; by contacting Goldman Sachs & Co. LLC at 1-866-471-2526, by facsimile at 212-902-9316, or by emailing prospectus-ny@ny.email.gs.com; by contacting Mizuho Securities USA LLC at (866) 271-7403. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Forward-Looking Statements The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on the current beliefs and expectations of Company management and current market conditions, which are subject to significant uncertainties and fluctuations. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, except as required by law, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Forward-looking statements in this release include that the closing of the offering is expected to occur on March 6, 2025, subject to the satisfaction of customary closing conditions, and that Meritage intends to use the net proceeds for general corporate purposes. Meritage’s business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company’s stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: increases in interest rates or decreases in mortgage availability, and the cost and use of rate locks and buy-downs; the cost of materials used to develop communities and construct homes; cancellation rates; supply chain and labor constraints; shortages in the availability and cost of subcontract labor; the ability of our potential buyers to sell their existing homes; our ability to acquire and develop lots may be negatively impacted if we are unable to obtain performance and surety bonds; the adverse effect of slow absorption rates; legislation related to tariffs; impairments of our real estate inventory; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our exposure to counterparty risk with respect to our capped calls; our ability to obtain financing if our credit ratings are downgraded; our exposure to and impacts from natural disasters or severe weather conditions; the availability and cost of finished lots and undeveloped land; the success of our strategy to offer and market entry-level and first move-up homes; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of earnest money or option deposits; our limited geographic diversification; our exposure to information technology failures and security breaches and the impact thereof; the loss of key personnel; changes in tax laws that adversely impact us or our homebuyers; our inability to prevail on contested tax positions; failure of our employees and representatives to comply with laws and regulations; our compliance with government regulations; liabilities or restrictions resulting from regulations applicable to our financial services operations; negative publicity that affects our reputation; potential disruptions to our business by an epidemic or pandemic, and measures that federal, state and local governments and/or health authorities implement to address it; and other factors identified in documents filed by the Company with the SEC, including those set forth in its Annual Report on Form 10-K for the year ended December 31, 2024 under the caption “Risk Factors.” About Meritage Homes Corporation Meritage is the fifth-largest public homebuilder in the United States, based on homes closed in 2023. The Company offers energy-efficient and affordable entry-level and first move-up homes. Operations span across Arizona, California, Colorado, Utah, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee. Contacts: Emily Tadano, VP Investor Relations and ESG  (480) 515-8979 (office)  investors@meritagehomes.com

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