Pulte Homes Inc. (NYSE:PHM) on Tuesday announced the buyback of $1.5 billion in notes for itself and Centex Corp. (NYSE:CTX), with which it expects to merge after a shareholder vote on August 18.

The notes, two series from Pulte and eight from Centex, mature between 2010 and 2016. However, Pulte is looking to retire as much as possible of $1.37 billion due in 2010 and 2011 before it takes on the longer-term debt.

When the merger plan was announced, ratings agencies Moody's and S&P noted that the combined company could be carrying as much as $6.2 billion in debt. At the close of the second quarter on June 30, Pulte had $1.6 billion in cash on hand; Centex had $1.44 billion.

The company plans to purchase the notes at a discount plus an early tender payment of $30 per thousand in value. Of the nearest-term maturity debt, Pulte is offering $1,020 per thousand on Centex 4.550% Notes due 2010; $1,070 per thousand on Centex 7.875% Notes due 2011; $1,072.50 on Pulte 8.125% Notes due 2011; and $1,077.50 on Pulte 7.875% Notes due 2011.

The remaining notes, all Centex, will be retired based on how much is left from the nearer-term debt buyback. Those maturities, which extend from 2012 to 2016, will be prioritized by due date.

Shares of Pulte were trading down 3.6% at $11.83 and Centex shares were off 3.8% at $11.48 late Tuesday morning amid a downturn in the entire builder group.