Beazer announces offering, shares down
NEW YORK (Reuters) - Led by Beazer Homes USA Inc (BZH.N), shares of homebuilders fell on Tuesday, a day after Beazer announced an equity offering that will dilute the value of existing shares.
Homebuilders, whose shares had rallied in recent weeks, joined a broader sell-off triggered by fears that a financial rescue package for Greece might not be enough to prevent a spreading sovereign debt crisis.
Homebuilders' shares were down 4.4 percent, according to the Dow Jones U.S. Home Construction Index .DJUSHB, while the S&P 500 was down 2.4 percent.
Beazer's shares were down 13.5 percent at $5.95 in late morning trading on the New York Stock Exchange.
Beazer, the eighth-largest U.S. builder, also posted earnings from continuing operations of 10 cents per share as its operations improved. Revenue rose 6 percent to $198.2 million and orders rose 49 percent to 1,673 homes.
But the Atlanta-based builder said it would sell 12.5 million shares, $300 million of senior unsecured notes and 3 million tangible equity units to repay debt.
The tangible equity units are a prepaid stock purchase contract and a senior note due 2013.
"Although dilutive, the capital structure changes benefit liquidity," UBS analyst David Goldberg wrote in a client note.