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 (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 amendment extends each of the (i) 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 (as
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 20, 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 Existing Notes tendered may be withdrawn at any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.
The Exchange Offer and Existing 2022 Notes
Consent Solicitation remain conditioned upon the 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 from time to time, including as amended on
April 13, 2018 and as described herein, the “Exchange Offer
Documents”), including the condition that at least $150.0 million
in aggregate principal amount of the Existing Notes shall have been
validly tendered (and not validly withdrawn prior to the Withdrawal
Deadline) prior to the Early Tender Deadline, and, other than as
previously amended on April 13, 2018 and the amendment described
above, the other terms, conditions and applicable dates of the
Exchange Offer and Existing 2022 Notes Consent Solicitation remain
unchanged.
The Exchange Offer will expire at 11:59 p.m.,
New York City time, on May 3, 2018, unless extended or earlier
terminated (such time and date, 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 Issuer intends for the “Early
Settlement Date” to occur promptly after the Early Tender Deadline.
It is anticipated that the Early Settlement Date will be the second
business day after the Early Tender Deadline. The Issuer reserves
the right, in its sole discretion, to designate the Early
Settlement Date at any date following the Early Tender Deadline.
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.
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
Hovnanian Enterprises, Inc., founded in 1959 by
Kevork S. Hovnanian, is headquartered in Matawan, 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 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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