Hovnanian Enterprises, Inc. (NYSE:HOV) (the “Company”) announced
today that its wholly owned subsidiary, K. Hovnanian
Enterprises, Inc. (“K. Hovnanian”), has received the requisite
consents to adopt the proposed amendments (the “Proposed
Amendments”) to 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”)
with respect to the 2024 Notes from holders of the 2024 Notes in
connection with K. Hovnanian’s previously announced solicitation of
consents with respect thereto (the “Consent Solicitation”), which
expired with respect to the 2024 Notes at 5:00 p.m., New York City
time, on January 12, 2018 (the “Expiration Date”). The Consent
Solicitations are 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”).
K. Hovnanian has notified Wilmington Trust, National
Association, the trustee and collateral agent under the indenture
related to the Notes (in both such capacities, the “Trustee”), that
it has received the consent of the Holders of at least a majority
in aggregate principal amount of outstanding 2024 Notes as required
to adopt the Proposed Amendments to the indenture governing the
Notes solely with respect to the 2024 Notes. Accordingly,
K. Hovnanian, the Company, as guarantor, the other guarantors
party thereto (together with the Company, the “Guarantors”), and
the Trustee executed on January 16, 2018 a supplemental indenture
to the indenture governing the Notes (the “Supplemental Indenture”)
effecting the Proposed Amendments with respect to the 2024 Notes.
The Supplemental Indenture is effective and constitutes a binding
agreement among K. Hovnanian, the Guarantors and the Trustee
as of its date of execution. However, the Supplemental Indenture,
by its terms, provides that the Proposed Amendments will not become
operative unless and until K. Hovnanian pays the consent
consideration to the Information and Tabulation Agent for the
consenting holders of the 2024 Notes, which it intends to do
promptly.
Holders of the 2024 Notes who validly delivered (and did not
validly revoke) consents to the Proposed Amendments in the manner
described in the Consent Solicitation Statement prior to the
Expiration Date are eligible to receive consent consideration equal
to $2.50 per $1,000 principal amount of 2024 Notes for which
consents were validly delivered prior to the Expiration Date (and
not validly revoked prior to the date the Supplemental Indenture
was executed and became effective). Holders of the 2024 Notes that
provide consents after the Expiration Date will not receive consent
consideration.
The Company also announced that K. Hovnanian has modified the
terms of the Consent Solicitation with respect to the 2022 Notes,
as set forth in a Supplement to the Consent Solicitation Statement,
dated January 16, 2018 (the “Supplement”), and as discussed
below.
As discussed in the Supplement, the terms of the Consent
Solicitation with respect to the 2022 Notes have been modified to
extend the expiration date and increase the consent consideration.
The expiration date for the Consent Solicitation has been extended
to 5:00 p.m., New York City time, on January 22, 2018 (such time
and date, as the same may be extended or earlier terminated, the
“2022 Notes Expiration Date”). Holders of 2022 Notes who validly
deliver (and do not validly revoke) consents to the Proposed
Amendments with respect to the 2022 Notes in the manner described
in the Consent Solicitation Statement will now be eligible to
receive consent consideration equal to $5.00 per $1,000 principal
amount of 2022 Notes for which consents have been validly delivered
prior to the 2022 Notes Expiration Date (and not validly
revoked).
Holders of 2022 Notes who have previously delivered consents do
not need to redeliver such consents or take any other action in
response to this announcement in order to consent or receive the
increased consent consideration upon the successful conclusion of
the Consent Solicitation relating to the 2022 Notes. Holders of the
2022 Notes are referred to the Consent Solicitation Statement for
the detailed terms and conditions of the Consent Solicitation with
respect to the 2022 Notes, all of which remain unchanged except as
set forth in this release and the Supplement.
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, the Supplement 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
Solicitation is being made only by, and pursuant to the terms of,
the Consent Solicitation Statement and with respect to the 2022
Notes, the Supplement, and the information in this news release is
qualified by reference to the Consent Solicitation Statement, and
with respect to the 2022 Notes, the Supplement. No recommendation
is made, or has been authorized to be made, as to whether or not
holders of 2022 Notes should consent to the adoption of the
Proposed Amendments pursuant to the Consent Solicitation. Each
holder of 2022 Notes must make its own decision as to whether to
give its consent to the Proposed Amendments. The Consent
Solicitation is 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
Solicitation is required to be made by a licensed broker or dealer,
the Consent Solicitation 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 Solicitation. Subject
to applicable law, K. Hovnanian may amend, extend or terminate the
Consent Solicitation.
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 Strategy
212-886-9376
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