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Press release from GlobeNewswire (a Nasdaq OMX company)

K. Hovnanian Enterprises, Inc. Announces Expiration of Consent Solicitation and Receipt of Requisite Consent to Amend Senior Notes Indenture

Thursday, April 21, 2011

K. Hovnanian Enterprises, Inc. Announces Expiration of Consent Solicitation and Receipt of Requisite Consent to Amend Senior Notes Indenture14:30 EDT Thursday, April 21, 2011RED BANK, N.J., April 21, 2011 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) (the "Company") announced today that its wholly-owned subsidiary, K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), has received the requisite consents to adopt the proposed amendment (the "Proposed Amendment") to the indenture (the "Indenture") governing K. Hovnanian's 8 5/8% Senior Notes due 2017 (the "Notes") in connection with K. Hovnanian's previously announced solicitation of consents (the "Consent Solicitation"), which expired at 5:00 p.m., New York City time, on April 21, 2011 (the "Expiration Date"). The Consent Solicitation was made in accordance with the terms and subject to the conditions stated in a Consent Solicitation Statement dated April 12, 2011 (the "Consent Solicitation Statement") and in the related Consent Form (together, the "Solicitation Documents"). Holders of Notes ("Holders") that validly delivered and did not revoke consents to the Proposed Amendment in the manner described in the Consent Solicitation Statement prior to the Expiration Date are eligible to receive consent consideration equal to $1.25 per $1,000 principal amount of Notes for which consents were validly delivered prior to the Expiration Date (and were not properly revoked). Consent consideration will be paid to consenting Holders as promptly as practicable after the satisfaction or waiver of the other conditions to the Consent Solicitation, including a financing condition (which is expected to be satisfied, if at all, after the Expiration Date), as further described in the Consent Solicitation Statement (the "Financing Condition"). K. Hovnanian has notified Deutsche Bank National Trust Company, the trustee under the Indenture (the "Trustee") that it has received the consent of the Holders of at least a majority in aggregate principal amount of outstanding Notes to the Proposed Amendment. Accordingly, K. Hovnanian, the Company, as guarantor, the other guarantors party thereto (together with the Company, the "Guarantors"), and the Trustee have executed a supplemental indenture (the "Supplemental Indenture") to the Indenture effecting the Proposed Amendment. The Supplemental Indenture is effective and constitutes a binding agreement among K. Hovnanian, the Guarantors and the Trustee, as of the date of its execution. However, the Supplemental Indenture by its terms provides that the Proposed Amendment will not become operative unless and until K. Hovnanian pays the consent consideration, which will be as promptly as practicable after the satisfaction or waiver of the other conditions to the Consent Solicitation, including the Financing Condition.  As previously disclosed, the purpose of the Proposed Amendment is to modify the Indenture to permit K. Hovnanian to issue additional first lien secured notes in an amount necessary to refinance through redemption all of its outstanding 11 1/2% Senior Secured Notes due 2013 (the "Second Lien Notes") and 18.0% Senior Secured Notes due 2017 (the "Third Lien Notes" and, together with the Second Lien Notes, the "Junior Lien Notes"). As of January 31, 2011, there were approximately $0.5 million aggregate principal amount of Second Lien Notes outstanding and approximately $11.7 million aggregate principal amount of Third Lien Notes outstanding.  Credit Suisse Securities (USA) LLC acted as the Solicitation Agent in connection with the Consent Solicitation. Persons with questions regarding the Consent Solicitation should contact Credit Suisse Securities (USA) LLC at (212) 538-2147 (collect) or (800) 820-1653 (toll-free) (Attention: Liability Management Group). Requests for copies of the Solicitation Documents and other related materials should be directed to Bondholder Communications Group, the Information and Tabulation Agent for the Consent Solicitation, at (888) 385-2663 (toll-free) or alternatively, the documents may be downloaded at K. Hovnanian's obligations to pay the consent consideration are set forth solely in the Solicitation Documents. This press release is neither an offer to purchase nor a solicitation of an offer to sell any Notes, first lien secured notes or Junior Lien Notes nor shall there be any sale of first lien secured notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any offer of first lien secured notes will be made only by means of a separate prospectus, offering circular or offering memorandum which would be made available at the time of such offering. 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 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 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 conditions and natural disasters, (3) changes in market conditions and other environmental 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, including in order to satisfy the financing condition for the Consent Solicitation (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, (18) the Company's sources of liquidity, (19) changes in credit ratings, (20) availability of net operating loss carryforwards and (21) other factors described in detail in the Company's Amendment No. 1 to the Annual Report on Form 10-K/A for the year ended October 31, 2010, the Company's quarterly report or Form 10-Q for the quarter ended January 31, 2011 and in the Consent Solicitation Statement.CONTACT: J. Larry Sorsby Executive Vice President & CFO 732-747-7800 Jeffrey T. O'Keefe Vice President of Investor Relations 732-747-7800