K. Hovnanian Enterprises, Inc. Announces New Senior Notes Offering
July 11 2017 - 6:31AM
Hovnanian Enterprises, Inc. (NYSE:HOV) (the “Company”) announced
today that its wholly owned subsidiary, K. Hovnanian Enterprises,
Inc. (“K. Hovnanian”), plans to issue an aggregate principal amount
of up to $840,000,000 of senior secured notes with maturities in
2022 and 2024 (collectively, the “Notes”) in a private placement
(the “Notes Offering”). The Notes will be guaranteed by the Company
and substantially all of its subsidiaries. The Notes and the
guarantees thereof will be secured by liens on substantially all
the assets of K. Hovnanian and the guarantors, subject to permitted
liens and certain exceptions. The liens securing the Notes will
rank junior to the liens securing K. Hovnanian’s $75.0 million
senior secured term loan facility and any other future secured
obligations that are senior in priority with respect to the assets
securing the Notes.
K. Hovnanian intends to use the net proceeds from the Notes
Offering to fund its previously announced offers and related
consent solicitations (the “Tender Offers”) to purchase for cash
any and all of its $75 million outstanding 10.000% Senior Secured
Second Lien Notes due 2018 (the “2018 Notes”), $145 million
outstanding 9.125% Senior Secured Second Lien Notes due 2020 (the
“2020 9.125% Notes”) and $577 million outstanding 7.250% Senior
Secured First Lien Notes due 2020 (the “2020 7.25% Notes”, and,
together with the 2018 Notes and the 2020 9.125% Notes, the
“Existing Secured Notes”), and/or to fund the redemption of all
Existing Secured Notes that have not been accepted and paid for in
the Tender Offers and to satisfy and discharge our obligations
under the related indentures and to pay related fees and
expenses.
The Notes have not been registered under the Securities Act of
1933, as amended (the “Securities Act”). The Notes may not be
offered or sold within the United States or to U.S. persons, except
to “qualified institutional buyers” in reliance on the exemption
from registration provided by Rule 144A and to certain persons in
offshore transactions in reliance on Regulation S. You are hereby
notified that sellers of the Notes may be relying on the exemption
from the provisions of Section 5 of the Securities Act provided by
Rule 144A. This announcement does not constitute an offer to sell
or the solicitation of an offer to buy Notes in any jurisdiction in
which such an offer or sale would be unlawful. This announcement
does not constitute an offer to purchase or the solicitation of an
offer to sell the Existing Secured Notes.
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,
2016 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:
J. Larry Sorsby
Executive Vice President & CFO
732-747-7800
Jeffrey T. O’Keefe
Vice President of Investor Relations
732-747-7800
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