RED BANK, N.J., May 16 /PRNewswire-FirstCall/ -- Hovnanian Enterprises,
Inc. (NYSE: HOV) announced today that it plans to issue an aggregate principal
amount of up to $600.0 million of 5-year senior secured notes (the "Notes") in
a private placement. The Company also expects to enter into an amendment to
its revolving credit agreement which decreases total commitments thereunder to
$300.0 million, increases the amount of collateral, and substantially
eliminates maintenance covenants (the "New Revolving Credit Agreement"). The
amendment has been approved by the Lenders subject to issuance of the Notes.
The Notes would be secured on a second-priority lien basis on
substantially all the assets owned by the Company and guarantors of the Notes
to the extent such assets secure obligations under the New Revolving Credit
Agreement and certain other permitted indebtedness.
The Company intends to use the net proceeds from the offering of the Notes
to repay amounts outstanding under its existing revolving credit agreement and
for general corporate purposes.
The Notes would be offered within the United States only to "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"). The Notes would also be offered outside
the United States to non-U.S. investors. The Notes to be offered would 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 announcement does not constitute an offer to sell or the
solicitation of an offer to buy such Notes in any jurisdiction in which such
an offer or sale would be unlawful.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian,
Chairman, 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, Kentucky, Maryland, Michigan, Minnesota,
New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina,
Texas, Virginia and West Virginia. The Company's homes are marketed and sold
under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes,
Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge
Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities,
the Company is also one of the nation's 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" within the meaning 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 risks, uncertainties and other factors
include, but are not limited to, (1) changes in general and local economic and
industry and business conditions, (2) adverse weather conditions and natural
disasters, (3) changes in market conditions and seasonality of the Company's
business, (4) changes in home prices and sales activity in the markets where
the Company builds homes, (5) government regulation, including regulations
concerning development of land, the home building, sales and customer
financing processes, and 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 Company's
operations and activities imposed by the agreements governing the Company's
outstanding indebtedness, (13) operations through joint ventures with third
parties, (14) product liability litigation and warranty claims, (15)
successful identification and integration of acquisitions, (16) significant
influence of the Company's controlling stockholders, (17) geopolitical risks,
terrorist acts and other acts of war and (18) other factors described in
detail in the Company's Form 10-K for the year ended October 31, 2007.
SOURCE Hovnanian Enterprises, Inc.
