KB Home gets default notices

MSN reports:

KB Home has received notices of default from US Bank for seven sets of its senior and senior subordinated notes that US Bank is the successor trustee for, the company said Monday.

The letters state that KB Home is in default under the indentures because it has not delivered a copy of its Form 10-Q for its third quarter ended Aug. 31, 2006. The notes involved include its 7-1/4 percent Senior Notes due 2018, 6-1/4 percent Senior Notes due 2015, 5-7/8 percent Senior Notes due 2015, and 5-3/4 percent Senior Notes due 2014 and with respect to KB Home's 8-5/8 percent Senior Subordinated Notes due 2008, 7-3/4 percent Senior Subordinated Notes due 2011, and 9-1/2 percent Senior Subordinated Notes due 2011.

Los Angeles-based KB Home (NYSE: KBH) says it is reviewing the letters as well as other similar letters it has previously received and is considering their validity as notices of default. Under the indentures, if the company fails to cure a default within the 60 days after notice is given, the default could become an "event of default" allowing trustees or holders of at least 25 percent of the outstanding principal amount to accelerate the maturity of the series.

The company said previously that it is soliciting consent from the holders of record of its senior notes to approve a proposed amendment to extend the time for the company to file the quarterly report no later than Feb. 23, 2007.

This is one of America's largest homebuilders.Just a sign that the demand for real estate is dropping right now.