Attached files
file | filename |
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8-K - FORM 8-K - HOVNANIAN ENTERPRISES INC | y93292e8vk.htm |
EX-4.1 - EX-4.1 - HOVNANIAN ENTERPRISES INC | y93292exv4w1.htm |
EX-4.2 - EX-4.2 - HOVNANIAN ENTERPRISES INC | y93292exv4w2.htm |
EX-10.1 - EX-10.1 - HOVNANIAN ENTERPRISES INC | y93292exv10w1.htm |
EX-10.2 - EX-10.2 - HOVNANIAN ENTERPRISES INC | y93292exv10w2.htm |
EXHIBIT 99.1
HOVNANIAN ENTERPRISES, INC. | News Release | |||
Contact:
|
J. Larry Sorsby | Jeffrey T. OKeefe | ||
Executive Vice President & CFO | Vice President, Investor Relations | |||
732-747-7800 | 732-747-7800 |
HOVNANIAN ENTERPRISES ANNOUNCES RESULTS OF PRIVATE DEBT EXCHANGE OFFERS
FOR CERTAIN OF ITS DEBT SECURITIES AND RECEIPT OF REQUISITE CONSENT IN CONSENT
SOLICITATION
FOR CERTAIN OF ITS DEBT SECURITIES AND RECEIPT OF REQUISITE CONSENT IN CONSENT
SOLICITATION
RED BANK, NJ, October 31, 2011 Hovnanian Enterprises, Inc. (NYSE: HOV) (the Company)
announced today the results of the private offers to exchange senior notes (collectively, the
Senior Notes) for new 5.00% Senior Secured Notes due 2021 (the 5.00% New Secured Notes) and new
2.00% Senior Secured Notes due 2021 (the 2.00% New Secured Notes, and together with the 5.00% New
Secured Notes, the New Secured Notes) to be issued in a private placement by K. Hovnanian
Enterprises, Inc., a wholly-owned subsidiary of the Company (K. Hovnanian), and to be guaranteed
by the Company and substantially all of its restricted subsidiaries. The New Secured Notes will be
secured by a first-priority lien on the assets of certain subsidiaries that are unrestricted
subsidiaries under K. Hovnanians existing indentures. The 5.00% New Secured Notes and 2.00% New
Secured Notes will be issued as separate series under an indenture, but will have substantially the
same terms other than with respect to interest rate and related redemption provisions, and will
vote together as a single class.
The exchange offers expired at 12:00 midnight, New York City time, on October 29, 2011 (the
Expiration Time). As of the Expiration Time, the following amounts of 2014 Notes and 2015 Notes
(each as defined below) had been properly tendered (and not validly withdrawn) and will be accepted
(without proration) for exchange into approximately $141.8 million aggregate principal amount of
5.00% New Secured Notes: $16.7 million in aggregate principal amount, or 31.33%, of the 61/2% Senior
Notes due 2014 (the 61/2% 2014 Notes); $26.2 million in aggregate principal amount, or 89.68%, of
the 63/8% Senior Notes due 2014 (the 63/8% 2014 Notes, and together with the 61/2% 2014 Notes, the
2014 Notes); $31.3 million in aggregate principal amount, or 59.34%, of the 61/4% Senior Notes due
2015 (the 61/4% 2015 Notes); and $67.6 million in aggregate principal amount, or 51.83%, of the
117/8% Senior Notes due 2015 (the 117/8% 2015 Notes or the Any and All Tender Notes,
and together with the 61/4% 2015 Notes, the 2015 Notes). Pursuant to the terms set forth in the
Confidential Offering Memorandum and Consent Solicitation Statement, as amended to date (the
Offering Memorandum), holders of 2014 Notes and 2015 Notes will also receive on the Settlement
Date (as defined below) a cash payment of $100 for each $1,000 principal amount of 2014 Notes and
2015 Notes that were properly tendered (and not validly withdrawn) and accepted for exchange (the
Cash Consideration). The aggregate Cash Consideration payable upon consummation of the exchange
offers is $14.2 million. In addition, as of the Expiration Time, the following amounts of 2016
Notes and 2017 Notes (each as defined below) had been properly tendered (and not validly
withdrawn): $13.3 million in aggregate principal amount, or 7.69%, of the 61/4% Senior Notes due 2016
(the 61/4% 2016 Notes); $20.7 million in aggregate principal amount, or 12.03%, of 71/2% Senior Notes
due 2016 (the 71/2% 2016 Notes, and together with the 61/4% 2016 Notes, the 2016 Notes); and $21.3
million in aggregate principal amount, or 10.89%, of the 8¨ý% Senior Notes due 2017 (the 2017
Notes). Of the tendered 2016 Notes and 2017 Notes, all of the 2016 Notes tendered were accepted
without proration, and $19.2 million of the $21.3 million in aggregate principal amount of the 2017
Notes tendered were accepted (representing a proration factor of 89.8%), because the Maximum New
Issuance Amount (as defined in the Offering Memorandum) of $195.0
million was insufficient to accept all of the 2017 Notes tendered. The accepted 2016 Notes and
2017 Notes will be exchanged for approximately $53.2 million aggregate principal amount of 2.00%
New Secured Notes. The settlement date for the exchange offers is expected to be November 1, 2011
(the Settlement Date).
Holders of Senior Notes that properly tendered (and did not validly withdraw) their Senior Notes
prior to the Expiration Time, and whose Senior Notes are accepted for exchange will receive the
applicable Total Consideration set forth in the Offering Memorandum. In addition, accrued interest
up to, but not including, the Settlement Date will be paid in cash on all properly tendered and
accepted Senior Notes.
The Company may, from time to time, make purchases and/or exchanges of Senior Notes through open
market purchases, private transactions or otherwise depending on market conditions and covenant
restrictions.
The exchange offers were made within the United States only to 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 pursuant to Regulation S under the Securities Act.
The New Secured Notes to be issued have not been and will not be registered under the Securities
Act and may not be offered or sold in the United States absent registration or an applicable
exemption from registration requirements. This press release does not constitute an offer to sell
or the solicitation of an offer to buy Senior Notes or New Secured Notes in any jurisdiction in
which such an offer or sale would be unlawful.
The exchange offers 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 and the accompanying Letter of Transmittal and Consent.
In addition, in connection with the consent solicitation, the Company announced that K.
Hovnanian has received the requisite consents to adopt the proposed amendments (the Proposed
Amendments) to the indenture (the Existing Indenture) governing K. Hovnanians Any and All
Tender Notes to eliminate substantially all of the restrictive covenants and certain of the default
provisions contained in the Existing Indenture. No consideration is being paid for the consents.
K. Hovnanian has notified Wilmington Trust Company, the trustee under the Existing Indenture (the
Trustee) that it has received the consent of the Holders of at least a majority in aggregate
principal amount of outstanding Any and All Tender Notes to the Proposed Amendments. Accordingly,
K. Hovnanian, the Company, as guarantor, the other guarantors party thereto (together with the
Company, the Guarantors), and the Trustee will enter into a supplemental indenture (the
Supplemental Indenture) to the Existing Indenture effecting the Proposed Amendments to be dated
as of the Settlement Date. The Consent Solicitation was made in accordance with the terms and
subject to the conditions stated in the Offering Memorandum.
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 nations largest homebuilders with operations in Arizona,
California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia.
The Companys homes are marketed and sold under the trade names K. Hovnanian® Homes®, Matzel &
Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes. As the
developer of K. Hovnanians® Four Seasons communities, the Company is also one of the nations
largest builders of active adult homes.
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. Although we believe that the Companys plans, intentions and
expectations reflected in, or suggested by such forward-looking statements are reasonable, neither
we nor the Company can provide assurance that such plans, intentions or expectations will be
achieved. Such risks, uncertainties and other factors include, but are not limited to, (1) changes
in general and local economic and industry and business conditions and impacts of the sustained
homebuilding downturn, (2) adverse weather, natural disasters and environmental conditions, (3)
changes in market conditions and seasonality of the Companys business, (4) changes in home prices
and sales activity in the markets where the Company builds homes, (5) government laws and
regulations, including, among others, those concerning development of land, the home building,
sales and customer financing processes, tax laws, and the protection of the environment, (6)
fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and
price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and
improved lots, (9) levels of competition, (10) availability of financing to the Company, (11)
utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on
the Companys operations and activities imposed by the agreements governing the Companys
outstanding indebtedness, (13) the Companys sources of liquidity, (14) changes in the Companys
credit ratings, (15) availability of net operating loss carryforwards, (16) operations through
joint ventures with third parties, (17) product liability litigation and warranty claims, (18)
successful identification and integration of acquisitions, (19) significant influence of the
Companys controlling stockholders, (20) geopolitical risks, terrorist acts and other acts of war,
and (21) other factors described in detail in the Companys Annual Report on Form 10-K/A for the
year ended October 31, 2010 and the Companys quarterly reports on Form 10-Q or 10-Q/A for the
quarters ended January 31, 2011, April 30, 2011 and July 31, 2011, respectively and in the Offering
Memorandum under Risk Factors. All forward-looking statements attributable to the Company, us or
persons acting on the Companys or our behalf are expressly qualified in their entirety by the
cautionary statements and risk factors contained throughout the Offering Memorandum. Except as
otherwise required by applicable securities laws, neither we nor the Company undertakes any
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.