Hovnanian Enterprises, Inc. Announces Credit Agreement and Refinancing Transaction With GSO Capital Partners
December 28 2017 - 4:37PM
Hovnanian Enterprises, Inc. (NYSE:HOV) (“Hovnanian” or the
“Company”) announced today that it has entered into financing
commitments with GSO Capital Partners LP (“GSO”), Blackstone’s
credit platform (NYSE:BX), and certain funds managed or advised by
it to refinance certain of the Company’s debt securities maturing
in 2019 and to purchase $25 million of the Company’s secured debt
securities. In connection with this agreement, the Company will pay
down certain debt securities coming due in the next one to two
years, which will be replaced with longer-term financing, most of
which will not be due until 2026 and beyond.
In addition to these refinancings, the GSO parties have
committed to provide the Company with a new $125 million senior
secured first lien revolving credit facility. The Company intends
to use $75 million of this revolving credit facility to refinance
its current $75 million first priority secured term loan subsequent
to the expiration of such term loan’s no-call period in September
of 2018. The remaining portion of the credit facility will be
available to the Company for general corporate purposes and provide
the Company with additional financial flexibility.
Hovnanian’s senior management and Board of Directors thoroughly
evaluated a range of available options to strategically manage the
Company’s debt obligations, with several financial firms competing
to refinance the Company’s existing debt. After careful review and
due diligence, the Company decided to pursue the refinancing
transactions with GSO.
“We continue to take steps to de-risk our balance sheet and
enhance our financial flexibility in support of our long-term
operations. We are pleased to enter into these financing and
refinancing transactions with affiliates of GSO, the credit
platform of Blackstone, one of the preeminent investment firms in
the world,” said Ara Hovnanian, President, Chief Executive Officer
and Chairman of Hovnanian.
About Hovnanian Enterprises, Inc.
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S.
Hovnanian, is headquartered in Red Bank, New Jersey. The Company is
one of the nation’s largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas,
Virginia, Washington, D.C. and West Virginia. The Company’s homes
are marketed and sold under the trade names K. Hovnanian® Homes,
Brighton Homes® and Parkwood Builders. As the developer of K.
Hovnanian’s® Four Seasons communities, the Company is also one of
the nation’s largest builders of active lifestyle communities.
Forward-Looking Statements
All statements in this press release that are not historical
facts should be considered as “Forward-Looking Statements” within
the meaning of the “Safe Harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Such statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such forward-looking statements include but are not
limited to statements related to the Company’s goals and
expectations with respect to its financial results for future
financial periods. Although we believe that our plans, intentions
and expectations reflected in, or suggested by, such
forward-looking statements are reasonable, we can give no assurance
that such plans, intentions or expectations will be achieved. By
their nature, forward-looking statements: (i) speak only as of the
date they are made, (ii) are not guarantees of future performance
or results and (iii) are subject to risks, uncertainties and
assumptions that are difficult to predict or quantify. Therefore,
actual results could differ materially and adversely from those
forward-looking statements as a result of a variety of factors.
Such risks, uncertainties and other factors include, but are not
limited to, (1) changes in general and local economic, industry and
business conditions and impacts of a sustained homebuilding
downturn; (2) adverse weather and other environmental conditions
and natural disasters; (3) levels of indebtedness and restrictions
on the Company’s operations and activities imposed by the
agreements governing the Company’s outstanding indebtedness; (4)
the Company's sources of liquidity; (5) changes in credit ratings;
(6) changes in market conditions and seasonality of the Company’s
business; (7) the availability and cost of suitable land and
improved lots; (8) shortages in, and price fluctuations of, raw
materials and labor; (9) regional and local economic factors,
including dependency on certain sectors of the economy, and
employment levels affecting home prices and sales activity in the
markets where the Company builds homes; (10) fluctuations in
interest rates and the availability of mortgage financing; (11)
changes in tax laws affecting the after-tax costs of owning a home;
(12) operations through joint ventures with third parties; (13)
government regulation, including regulations concerning development
of land, the home building, sales and customer financing processes,
tax laws and the environment; (14) product liability litigation,
warranty claims and claims made by mortgage investors; (15) levels
of competition; (16) availability and terms of financing to the
Company; (17) successful identification and integration of
acquisitions; (18) significant influence of the Company’s
controlling stockholders; (19) availability of net operating loss
carryforwards; (20) utility shortages and outages or rate
fluctuations; (21) geopolitical risks, terrorist acts and other
acts of war; (22) increases in cancellations of agreements of sale;
(23) loss of key management personnel or failure to attract
qualified personnel; (24) information technology failures and data
security breaches; (25) legal claims brought against us and not
resolved in our favor; and (26) certain risks, uncertainties and
other factors described in detail in the Company’s Annual Report on
Form 10-K for the fiscal year ended October 31, 2017 and subsequent
filings with the Securities and Exchange Commission. Except as
otherwise required by applicable securities laws, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
changed circumstances or any other reason.
Contact: |
|
Jeffrey T.
O’KeefeVice President of Investor Relations732-747-7800 |
|
Ethan
LyleTeneo Strategy212-886-9376 |
Hovnanian Enterprises (NYSE:HOV)
Historical Stock Chart
From Aug 2024 to Sep 2024
Hovnanian Enterprises (NYSE:HOV)
Historical Stock Chart
From Sep 2023 to Sep 2024