Oct. 20, 2009 (PR Newswire) --
RED BANK, N.J., Oct. 20 /PRNewswire-FirstCall/ --
New Secured Notes
Hovnanian Enterprises, Inc. (NYSE: HOV) (the "Company") announced the closing today of the private placement offering of $785.0 million of 10(5)/(8)% Senior Secured Notes due 2016 (the "New Secured Notes") issued by K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), a wholly owned subsidiary of the Company, and guaranteed by the Company and substantially all of its subsidiaries. The New Secured Notes and the guarantees thereof will be secured on a first-priority lien basis by substantially all the assets owned by the Company and the guarantors, subject to permitted liens and certain exceptions. The proceeds of the New Secured Notes offering were used, together with cash on hand, to fund the Tender Offers discussed below. In connection with the New Secured Notes Offering, K. Hovnanian terminated its revolving credit facility and entered into certain letter of credit facilities.
The New Secured Notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A and outside the United States in compliance with Regulation S under the Securities Act of 1933, as amended (the "Securities Act").
The New Secured Notes 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.
Tender Offers
The Company also announced the expiration and final results of K. Hovnanian's tender offers to purchase for cash (i) any and all of its outstanding 11½% Senior Secured Notes due 2013 (the "2013 Secured Notes") (the "2013 Secured Notes Tender Offer"), (ii) any and all of its outstanding 18% Senior Secured Notes due 2017 (the "2017 Secured Notes" and, together with the 2013 Secured Notes, the "Secured Notes") (the "2017 Secured Notes Tender Offer" and, together with the 2013 Secured Notes Tender Offer, the "Secured Notes Tender Offers") and (iii) the maximum aggregate principal amount of its outstanding 8% Senior Notes due 2012 (the "8% 2012 Notes"), 6½% Senior Notes due 2014 (the "6½% 2014 Notes"), 6 3/8% Senior Notes due 2014 (the "6 3/8% 2014 Notes"), 6¼% Senior Notes due 2015 (the "6¼% 2015 Notes"), 7½% Senior Notes due 2016 (the "7½% 2016 Notes") and 6¼% Senior Notes due 2016 (the "6¼% 2016 Notes" and collectively with the 8% 2012 Notes, 6½% 2014 Notes, 6 3/8% 2014 Notes, 6¼% 2015 Notes and 7½% 2016 Notes, the "Unsecured Notes," and, together with the Secured Notes, the "Notes") to be purchased for a maximum aggregate consideration, excluding accrued and unpaid interest, of $100.0 million (the "Unsecured Notes Tender Offer" and, together with the Secured Notes Tender Offers the "Tender Offers"). In connection with the 2013 Secured Notes Tender Offer and the 2017 Secured Notes Tender Offer, K. Hovnanian solicited and, as previously announced, received, consents (the "Consent Solicitations") to amend certain provisions of the indentures governing the Secured Notes.
Each Tender Offer expired at 12:00 midnight, New York City time, on October 19, 2009 (with respect to each Tender Offer, the "Expiration Date"). Holders of Notes were required to have validly tendered and not withdrawn their Notes on or prior to 5:00 p.m., New York City time, on October 2, 2009 (with respect to each Tender Offer, the "Early Tender Date"), in order to receive the Total Consideration for their Notes.
