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Shares of Lennar Corp. (LEN) soared more than 12%early Friday, following late Thursday's announcement that it sold $400 million in senior notes due in 2017, a surprising move that helps ease liquidity concerns.

The news signals hope for home builders, further showing paralyzed credit markets are thawing for the battered industry that's struggling to survive a prolonged downturn.

"This placement has huge implications for the rest of the home builder space," wrote Pali Research's Stephen East. "Bluntly, the debt markets are open for the builders and one should expect other offerings in rapid succession."

Possibilities he lists include industry giant DR Horton (DHI), Meritage (MTH) and NVR Inc.(NVR). Those builders weren't immediately available for comment.

Lennar's offering comes just after luxury builder Toll Brothers (TOL) sold $400 million senior notes due in 2017 with coupon at 8.91%.

Lennar's rate, however, was 12.25%.But the offering was scaled up from $250 million, indicating strong demand. This, in addition to the recent $275 million equity shelf filing, should bolster the builder.

Even without the potential offering, cash raised on the debt offering will service nearly two-thirds of debt maturities coming due in 2009 and 2010, East said.

"When one works through all the expected cash needs from debt maturities, JV cash outlays and land spend, we believe LEN is now in excellent shape to not only survive, but thrive," he wrote.

The Miami-based company, one of the nation's largest builders, said it will use the proceeds for general corporate purposes, possibly including repayment or repurchase of near-term debt maturities or of debt of its joint ventures that it has guaranteed.

The deal was priced at 98.123, and the yield at 12.625%.

Shares of Lennar spiked more than 15% in early trading, before retreating slightly, though it continued to easily lead the sector. The Dow Jones US Home Construction Index recently traded up 1.7%.

-By Dawn Wotapka; Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com