Hovnanian Enterprises, Inc. (NYSE:HOV) (the “Company”) announced
today that its wholly-owned subsidiary, K. Hovnanian Enterprises,
Inc. (the “Issuer”), has amended certain terms of its previously
announced private offer to exchange (the “Exchange Offer”) any and
all of the Issuer’s $440.0 million outstanding 10.000% Senior
Secured Notes due 2022 (the “Existing 2022 Notes”) and $400.0
million outstanding 10.500% Senior Secured Notes due 2024 (the
“Existing 2024 Notes,” and together with the Existing 2022 Notes,
the “Existing Notes”) for the Issuer’s newly issued 3.0% Senior
Notes due 2047 (the “New Notes”) and concurrent solicitation of
consents with respect to the Existing 2022 Notes (the “Existing
2022 Notes Consent Solicitation”).
The Issuer has amended the definition of
“Minimum Exchange Condition” for the Exchange Offer to mean that at
least $50.0 million in aggregate principal amount of the Existing
Notes shall have been validly tendered (and not validly withdrawn
prior to the Withdrawal Deadline (defined below)) prior to the
Early Tender Deadline (defined below).
The amendments also extend each of (i) the
deadline for tendering Existing Notes (and, if applicable,
delivering consents) in order to receive the exchange consideration
of $1,400 principal amount of New Notes for each $1,000 principal
amount of Existing Notes validly tendered and accepted in the
Exchange Offer (the “Exchange Consideration”) on the Early
Settlement Date (defined below) (such time and date, as the same
may be extended, the “Early Tender Deadline”) and (ii) the deadline
for withdrawing tendered Existing Notes (and, if applicable,
revoking consents) (such time and date, as the same may be
extended, the “Withdrawal Deadline”) to 5:00 p.m., New York City
time, on April 27, 2018, unless extended. Existing Notes tendered
may be withdrawn at any time prior to the Withdrawal Deadline, but
not thereafter, unless required by applicable law. Assuming that
the conditions to the Exchange Offer are satisfied or waived, the
Issuer intends for the “Early Settlement Date” to be April 30,
2018, unless otherwise designated by the Issuer.
As of 5:00 p.m., New York City time, on April
23, 2018, the Issuer had received valid tenders in an aggregate
principal amount that would satisfy the Minimum Exchange Condition
(as defined herein). Such tendered Existing Notes remain subject to
withdrawal rights to the Withdrawal Deadline (as extended as
provided herein).
The Exchange Offer will expire at 11:59 p.m.,
New York City time, on May 3, 2018, unless extended or earlier
terminated by the Issuer (such date and time, as the same may be
extended, the “Expiration Time”). In order to receive the Exchange
Consideration on the Early Settlement Date, eligible holders must
validly tender their Existing Notes prior to the Early Tender
Deadline. Eligible holders who validly tender their Existing Notes
after the Early Tender Deadline but on or prior to the Expiration
Time will receive the Exchange Consideration on the Final
Settlement Date (as defined below). Assuming that the conditions to
the Exchange Offer are satisfied or waived, the “Final Settlement
Date” will be promptly after the Expiration Time and is expected to
be the business day after the Expiration Time.
The Exchange Offer and Existing 2022 Notes
Consent Solicitation remain conditioned upon the other conditions
set forth in the Confidential Offering Memorandum, dated April 6,
2018, and in the related Letter of Transmittal and Consent (as such
documents may be amended or supplemented from time to time,
including as amended on April 13, 2018, April 19, 2018 and April
23, 2018 and as described herein, the “Exchange Offer Documents”),
and, other than the amendments described above (including the
amendment of the Minimum Exchange Condition), the other terms and
conditions of the Exchange Offer and Existing 2022 Notes Consent
Solicitation as set forth in the Exchange Offer Documents remain
unchanged.
Global Bondholder Services Corporation is
serving as the exchange agent, tabulation agent and information
agent for the Exchange Offer and Existing 2022 Notes Consent
Solicitation. Any question regarding procedures for tendering
Existing Notes and delivering consents in the Existing 2022 Notes
Consent Solicitation and requests for copies of the Exchange Offer
Documents may be directed to Global Bondholder Services Corporation
by phone at 866-470-4300 (toll free) or 212-430-3774.
This press release is neither an offer to
purchase or sell nor a solicitation of an offer to sell or buy the
Existing Notes, the New Notes or any other securities of the Issuer
or the Company. This press release also is not a solicitation of
consents to the proposed amendment to the indenture governing the
Existing 2022 Notes. The Exchange Offer and Existing 2022 Notes
Consent Solicitation are being made solely on the terms and subject
to the conditions set forth in the Exchange Offer Documents and the
information in this press release is qualified by reference to such
Exchange Offer Documents.
The Exchange Offer is being made within the
United States only to persons reasonably believed to be “qualified
institutional buyers” pursuant to Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”), and outside the
United States to non-U.S. investors. The New Notes have not been
and will not be registered under the Securities Act, or any state
securities laws. The New Notes may not be offered or sold within
the United States or to U.S. persons, except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws.
About Hovnanian Enterprises®,
Inc.
Hovnanian Enterprises, Inc., founded in 1959 by
Kevork S. Hovnanian, is headquartered in Matawan, New Jersey and,
through its subsidiaries, 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. Additionally, the Company’s subsidiaries, as developers
of K. Hovnanian’s® Four Seasons communities, make the Company 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”. 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 in the Offering Memorandum. 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’Keefe
Vice President of Investor Relations
732-747-7800
Ethan Lyle
Teneo Strategy
212-886-9376
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