Hovnanian Enterprises, Inc. (NYSE:HOV) (the “Company”)
announced today that its wholly owned subsidiary, K. Hovnanian
Enterprises, Inc. (“K. Hovnanian”), has commenced the solicitation
of consents (the “Consent Solicitations”) to amend (the “Proposed
Amendments”) the indenture (the “Indenture”) governing K.
Hovnanian’s 10.000% Senior Secured Notes due 2022 (the “2022
Notes”) and 10.500% Senior Secured Notes due 2024 (the “2024
Notes,” each of the 2022 Notes and 2024 Notes, a “Series” of Notes,
and collectively, the “Notes”). The Consent Solicitation with
respect to each Series of Notes is a separate Consent Solicitation
and is not conditioned upon the other Consent Solicitation. The
Consent Solicitations are being made in accordance with the terms
and subject to the conditions stated in a Consent Solicitation
Statement, dated December 28, 2017 (the “Consent Solicitation
Statement”). As of the date of the Consent Solicitation Statement,
the aggregate outstanding principal amount of the 2022 Notes was
$440,000,000, and the aggregate outstanding principal amount of the
2024 Notes was $400,000,000.
Each Consent Solicitation is scheduled to expire
at 5:00 p.m., New York City time, on January 12, 2018, unless
extended or earlier terminated (with respect to each Series of
Notes, the “Expiration Date”). Holders of Notes who validly deliver
consents to the applicable Proposed Amendments in the manner
described in the Consent Solicitation Statement will be eligible to
receive consent consideration equal to $2.50 per $1,000 principal
amount of Notes for which consents have been validly delivered
prior to the applicable Expiration Date (and not validly revoked).
Holders providing consents after the applicable Expiration Date
will not receive consent consideration. Consent consideration will
be paid to consenting holders as promptly as practicable after the
satisfaction or waiver of the conditions to the Consent
Solicitations, as further described in the Consent Solicitation
Statement.
The purpose of the Consent Solicitations is to
obtain from holders approval of the Proposed Amendments to
eliminate the restrictions on the Company’s ability to purchase,
repurchase, redeem, acquire or retire for value K. Hovnanian’s
7.000% Senior Notes due 2019 and 8.000% Senior Notes due 2019 and
refinancing or replacement indebtedness in respect thereof
contained in the indenture governing the Notes.
The consummation of each Consent Solicitation is
subject to a number of conditions that are set forth in the Consent
Solicitation Statement, including, without limitation, (i) the
receipt of the consent of the holders of at least a majority in
aggregate principal amount of the outstanding Notes of the
applicable Series (with respect to each Series of Notes, the
“Requisite Consents”) prior to the applicable Expiration Date and
(ii) the execution and effectiveness of a supplemental
indenture effecting the Proposed Amendments to the applicable
Indenture.
Consents may be revoked prior to the date the
applicable supplemental indenture giving effect to the Proposed
Amendments is executed and becomes effective (which, in each case,
is expected to be promptly after receipt of the Requisite Consents
for the applicable Series of Notes and may occur prior to the
applicable Expiration Date if the Requisite Consents for such
Series of Notes are received before then). If the Requisite
Consents for a Series of Notes are received and the applicable
supplemental indenture is executed and becomes effective, upon
payment by K. Hovnanian of the consent consideration to the
consenting holders of Notes of the applicable Series, the
applicable Proposed Amendments will be operative and be binding
upon all holders of Notes of the applicable Series, whether or not
such holders have delivered Consents. A more comprehensive
description of the Consent Solicitations can be found in the
Consent Solicitation Statement.
Requests for copies of the Consent Solicitation
Statement and other related materials should be directed to Global
Bondholder Services Corporation, the Information and Tabulation
Agent for the Consent Solicitations, at (212) 430-3774 (collect) or
(866) 470-4300 (toll-free).
K. Hovnanian’s obligations to pay the consent
consideration are set forth solely in the Consent Solicitation
Statement. This press release and the Consent Solicitation
Statement shall not constitute an offer to sell nor a solicitation
of an offer to purchase any Notes or other securities. The Consent
Solicitations are being made only by, and pursuant to the terms of,
the Consent Solicitation Statement, and the information in this
news release is qualified by reference to the Consent Solicitation
Statement. No recommendation is made, or has been authorized to be
made, as to whether or not holders of Notes should consent to the
adoption of the Proposed Amendments pursuant to the Consent
Solicitations. Each holder of Notes must make its own decision as
to whether to give its consent to the Proposed Amendments. The
Consent Solicitations are not being made in any jurisdiction in
which the making thereof would not be in compliance with the
applicable laws of such jurisdiction. In any jurisdiction in which
the Consent Solicitations are required to be made by a licensed
broker or dealer, the Consent Solicitations will be deemed to be
made on behalf of K. Hovnanian by one or more registered brokers or
dealers licensed under the laws of such jurisdiction. None of the
Company, K. Hovnanian or the Information and Tabulation Agent
makes any recommendation in connection with the Consent
Solicitations. Subject to applicable law, K. Hovnanian may amend,
extend or terminate the Consent Solicitations.
About Hovnanian Enterprises
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.” 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’Keefe
Vice
President of Investor Relations
732-747-7800
Ethan Lyle Teneo Strategy212-886-9376
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