Hovnanian Enterprises, Inc. (NYSE: HOV) (the “Company”) announced
today the results of the offers to exchange (the “Exchange Offers”)
by its wholly-owned subsidiary, K. Hovnanian Enterprises, Inc. (the
“Issuer”), the Issuer’s outstanding 10.000% senior secured notes
due 2022 (the “Old 2022 Notes”) and outstanding 10.500% senior
secured notes due 2024 (the “Old 2024 Notes” and, together with the
Old 2022 Notes, the “Old Notes”) for new 10.000% Senior Secured
1.75 Lien Notes due 2025 (the “New 2025 Notes”) to be issued by the
Issuer, and to be guaranteed by the Company and substantially all
of its subsidiaries, other than the Issuer, its home mortgage
subsidiaries, certain of its title insurance subsidiaries, joint
ventures and subsidiaries holding interests in joint ventures
(collectively, the “Guarantors”) and related solicitations of
consents from holders of the Old Notes to certain proposed
amendments to the indenture governing the Old Notes (the “Consent
Solicitations”).
The Exchange Offers expired at 11:59 p.m., New
York City time, on December 5, 2019 (the “Expiration Date”). As of
the Expiration Date, $23,152,000 aggregate principal amount, or
10.6%, of Old 2022 Notes and $141,708,000 aggregate principal
amount, or 67.0%, of Old 2024 Notes had been properly tendered (and
not validly withdrawn) and will be accepted (without proration) for
exchange pursuant to the terms set forth in the Confidential
Offering Memorandum and Consent Solicitation Statement, as amended
on November 21, 2019 (the “Offering Memorandum”), for $158,502,000
aggregate principal amount of New 2025 Notes. The settlement date
for the Exchange Offers is expected to be on or shortly following
December 10, 2019 (the “Settlement Date”).
Holders of Old Notes that properly tendered (and
did not validly withdraw) their Old Notes at or prior to the
Expiration Date, and whose Old Notes are accepted for exchange will
receive the early participation consideration or the exchange
consideration, as applicable, as set forth in the Offering
Memorandum. In addition, accrued and unpaid interest to, but not
including, the Settlement Date and, if applicable, amounts due in
lieu of fractional amounts of New 2025 Notes will be paid in cash
on properly tendered and accepted Old Notes.
In addition, in connection with the Consent
Solicitations, the Company announced that the Issuer has received
the requisite consents from the holders of the Old 2024 Notes to
adopt the proposed amendments (the “Proposed Amendments”) to the
indenture (the “Existing Indenture”) governing the Old Notes to
eliminate most of the restrictive covenants, certain affirmative
covenants and certain of the events of default contained in the
Existing Indenture with respect to the Old 2024 Notes. No
additional consideration is being paid for the consents. The Issuer
did not receive the requisite consents from the holders of the Old
2022 Notes to adopt the Proposed Amendments to the Existing
Indenture with respect to the Old 2022 Notes and therefore the Old
2022 Notes will continue to be subject to the terms of the Existing
Indenture without giving effect to the Proposed Amendments.
The Exchange Offers and Consent Solicitations
were made only by, and pursuant to, the terms set forth in the
Offering Memorandum, and the information in this press release is
qualified by reference to the Offering Memorandum.
In addition, the Company and the Issuer
announced that in connection with the completion of the Exchange
Offers, the Issuer expects to exchange certain of its outstanding
unsecured indebtedness for up to $81,498,000 of debt that is
secured on a pari passu basis with the New 2025 Notes (the “New
Pari Passu Debt”) to be issued or borrowed by the Issuer and
guaranteed by the Guarantors. The terms of the New Pari Passu Debt
may differ from the New 2025 Notes.
Global Bondholder Services Corporation is
serving as the exchange agent and information agent for the
Exchange Offers. Any question regarding the Exchange Offers or the
Consent Solicitations or the procedures for tendering Old Notes and
requests for copies of the Offering Memorandum may be directed to
Global Bondholder Services by phone at 866-470-3800 (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
Old Notes, the New 2025 Notes or any other securities of the Issuer
or the Company, including any securities to be issued to the
holders of the Issuer’s unsecured indebtedness, nor shall there be
any such offer, solicitation or sale in any state or other
jurisdiction in which such an offer, solicitation or sale would be
unlawful. This press release also is not a solicitation of consents
to the Proposed Amendments to the Existing Indenture. The Exchange
Offers were made solely on the terms and subject to the conditions
set forth in the Offering Memorandum and the information in this
press release is qualified by reference to such Offering
Memorandum.
The New 2025 Notes have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), or with any securities regulatory authority of
any State or other jurisdiction. The Exchange Offers were made, and
the New 2025 Notes were offered and will only be issued, to holders
of Old Notes either (a) in the United States, that are “qualified
institutional buyers,” as that term is defined in Rule 144A under
the Securities Act, in a private transaction in reliance upon an
exemption from the registration requirements of the Securities Act
or (b) (i) outside the United States, that are persons other than
“U.S. persons,” as that term is defined in Rule 902 under the
Securities Act, in offshore transactions in reliance upon
Regulation S under the Securities Act, (ii) if located or resident
in any Member State of the European Economic Area which has
implemented Directive 2003/71/EC, as amended (the “Prospectus
Directive”), who are “Qualified Investors” as defined under the
Prospectus Directive and (iii) if located or resident in Canada, is
an “accredited investor” as defined in National Instrument 45- 106
– Prospectus Exemptions (“NI 45-106”) or section 73.3(1) of the
Securities Act (Ontario) and is a “permitted client” as defined in
National Instrument 31-103 - Registration Requirements, Exemptions
and Ongoing Registrant Obligations (“NI 31-103”).
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 name K. Hovnanian® Homes. 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” within the meaning of the “Safe
Harbor” provisions of the Private Securities Litigation Reform Act
of 1995. 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
significant homebuilding downturn; (2) adverse weather and other
environmental conditions and natural disasters; (3) high leverage
and restrictions on the Company’s operations and activities imposed
by the agreements governing the Company’s outstanding indebtedness;
(4) availability and terms of financing to the Company; (5) the
Company’s sources of liquidity; (6) changes in credit ratings; (7)
the seasonality of the Company’s business; (8) the availability and
cost of suitable land and improved lots and sufficient liquidity to
invest in such land and lots; (9) shortages in, and price
fluctuations of, raw materials and labor including due to changes
in trade policies, such as the imposition of tariffs and duties on
homebuilding materials and products, and related trade disputes
with and retaliatory measures taken by other countries; (10)
reliance on, and the performance of, subcontractors; (11) 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; (12)
increases in cancellations of agreements of sale; (13) fluctuations
in interest rates and the availability of mortgage financing; (14)
changes in tax laws affecting the after-tax costs of owning a home;
(15) operations through unconsolidated joint ventures with third
parties; (16) government regulation, including regulations
concerning development of land, the home building, sales and
customer financing processes, tax laws and the environment; (17)
legal claims brought against us and not resolved in our favor, such
as product liability litigation, warranty claims and claims made by
mortgage investors; (18) levels of competition; (19) successful
identification and integration of acquisitions; (20) significant
influence of the Company’s controlling stockholders; (21)
availability of net operating loss carryforwards; (22) utility
shortages and outages or rate fluctuations; (23) geopolitical
risks, terrorist acts and other acts of war; (24) loss of key
management personnel or failure to attract qualified personnel;
(25) information technology failures and data security breaches;
(26) negative publicity; and (27) 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, 2018 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 |
Jeffrey T. O’Keefe |
|
Executive Vice President & CFO |
Vice President, Investor Relations |
|
732-747-7800 |
732-747-7800 |
|
|
|
Hovnanian Enterprises (NYSE:HOV)
Historical Stock Chart
From Feb 2024 to Mar 2024
Hovnanian Enterprises (NYSE:HOV)
Historical Stock Chart
From Mar 2023 to Mar 2024