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Press release from GlobeNewswire (a Nasdaq OMX company)

Hovnanian Announces Pricing of $280.5 Million Aggregate Offerings of Common Stock, Tangible Equity Units and Senior Unsecured Notes

Friday, February 04, 2011

Hovnanian Announces Pricing of $280.5 Million Aggregate Offerings of Common Stock, Tangible Equity Units and Senior Unsecured Notes04:52 EST Friday, February 04, 2011RED BANK, N.J., Feb. 4, 2011 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) (the "Company") announced today that it priced its previously announced offering of $50.5 million of its Class A Common Stock at $4.30 per share, resulting in net proceeds of approximately $47.7 million. The Company and K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), the Company's wholly-owned subsidiary, also priced their offering of 3.0 million 7.25% tangible equity units, each with a stated amount of $25.00, resulting in net proceeds of approximately $72.5 million. K. Hovnanian's 11.875% senior unsecured notes due 2015 were priced at 97.453% of the $155.0 million aggregate principal amount to be issued, resulting in net proceeds of approximately $147.9 million. The Company has granted the underwriters of the Class A Common Stock and tangible equity units offerings a 30-day option to purchase up to an additional 1.7625 million shares of Class A Common Stock and 450,000 tangible equity units, respectively, to cover over-allotments. The senior unsecured notes offering is conditioned upon the completion of the Class A Common Stock offering and the tangible equity units offering, but neither the Class A Common Stock offering nor the tangible equity units offering is conditioned upon the completion of each other or the senior unsecured notes offering. Each offering is subject to customary closing conditions. Each tangible equity unit is comprised of a prepaid stock purchase contract issued by the Company and a senior subordinated amortizing note due 2014 issued by K. Hovnanian. Each prepaid stock purchase contract has a mandatory settlement date of February 15, 2014 (subject to postponement in limited circumstances) and will settle for between 4.7655 and 5.8140 shares of Class A Common Stock (subject to adjustment as described in the final prospectus relating to the tangible equity units offering). The amortizing notes will pay holders equal quarterly cash installments of $0.453125 per amortizing note, which cash payments in the aggregate will be equivalent to 7.25% per year with respect to each $25 stated amount of tangible equity units. The amortizing notes have a final installment payment date of February 15, 2014. The Company's Class A Common Stock is listed on the New York Stock Exchange under the symbol "HOV" and the Company will apply to list the tangible equity units on the New York Stock Exchange, subject to satisfaction of its minimum listing standards. The Company and K. Hovnanian intend to use the net proceeds from these concurrent offerings to fund the purchase of K. Hovnanian's 8% Senior Notes due 2012, 8⅞% Senior Subordinated Notes due 2012 and 7¾% Senior Subordinated Notes due 2013 pursuant to tender offers for such securities, which were commenced on January 31, 2011, and by redemption to the extent such notes are not purchased in the tender offers. The remainder of the net proceeds will be used for general corporate purposes. J.P. Morgan, Credit Suisse, BofA Merrill Lynch and Citi are serving as the joint book-running managers for the Class A Common Stock offering and Wells Fargo Securities is serving as co-manager. Credit Suisse, Citi and J.P. Morgan are serving as the joint book-running managers for the tangible equity units offering and BofA Merrill Lynch, Deutsche Bank Securities and Wells Fargo Securities are serving as co-managers. Credit Suisse, Citi, Deutsche Bank Securities and J.P. Morgan are serving as the joint book-running managers for the senior unsecured notes offering. The shares of Class A Common Stock, the tangible equity units, including the underlying stock purchase contracts and senior subordinated amortizing notes, and the senior unsecured notes will all be issued pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission on Form S-3 and available on the SEC's website, http://www.sec.gov. Preliminary prospectus supplements related to each of the offerings have been filed with the Securities and Exchange Commission and are available on the SEC's website, http://www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying base prospectus related to the Class A Common Stock offering may be obtained from J.P. Morgan Securities LLC c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by calling 1-866-803-9204. Copies of the preliminary prospectus supplements and the accompanying base prospectus related to the tangible equity units and senior unsecured notes offerings may be obtained from Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010 or by calling 1-800-221-1037. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. Any offer of the securities will be made only by means of a prospectus, forming a part of the effective registration statement, the applicable preliminary prospectus supplement and other related documents.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, Kentucky, Maryland, 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, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster 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. The Hovnanian Enterprises, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7499FORWARD-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 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 and other environmental 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, tax laws, 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) the Company's sources of liquidity, (14) changes in 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 Company's controlling stockholders, (20) geopolitical risks, terrorist acts and other acts of war, and (21) other factors described in detail in the Company's Annual Report on Form 10-K/A for the year ended October 31, 2010. 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