Standard Pacific Will Sell $100 Million in Senior Notes

Standard Pacific Corp. said Wednesday that it will sell $100 million in senior notes to raise cash to reduce debt and to redeem earlier, higher-interest-rate notes.

The sale, which is scheduled to begin in about two weeks, is the largest public debt offering in Standard Pacific’s history. It is being made under a registration statement previously filed with the Securities and Exchange Commission. Lehman Brothers will be the sole underwriter.

Standard Pacific is best known as a major home builder in California and parts of Texas. It also operates a savings and loan in Newport Beach and manufactures office furniture through a subsidiary based in Santa Ana.

Most of the debt offering will be applied to repayment of the home building operation’s debts, said April J. Morris, Standard Pacific’s chief financial officer.

A note is an unsecured promise to repay the purchaser, with interest--the equivalent of a corporate IOU. A senior note is one that takes precedence over a company’s other unsecured debt if all repayment schedules cannot be met.

Standard Pacific’s debt load includes more than $80 million in secured debt under its nearly $140-million bank line of credit, as well as $32 million in 13.875% unsecured notes and $18 million in 12.75% unsecured notes, Morris said. Most of that represents debts of the home building unit.

The company said it intends to use proceeds of the new debt offering, for which an interest rate has not yet been set, to repay all of the 13.875% notes and at least a portion of the 12.75% notes, as well as to reduce what it owes to banks.