Hovnanian marks early tenders in offers for 10%, 9 1/8% and 7¼% notes

By Susanna Moon

Chicago, July 11 – Hovnanian Enterprises, Inc. gave an early tender update in the tender offers being held by subsidiary K. Hovnanian Enterprises, Inc. as of 5 p.m. ET on July 10.

As announced June 26, the issuer began tenders for its $75 million 10% senior secured second-lien notes due 2018, $145 million 9 1/8% senior secured second-lien notes due 2020 and $577 million 7¼% senior secured first-lien notes due 2020.

Investors had tendered all of the 10% notes; $87,321,000, or 60.22%, of the 9 1/8% notes; and $573,912,000, or 99.46%, of the 7¼% notes as of the early deadline.

Hovnanian extended the early deadline for the 9 1/8% notes and the 7¼% notes until 5 p.m. ET on July 12 from 5 p.m. ET on July 10, according to a company notice on Tuesday.

The tender offers were extended to 11:59 p.m. ET on July 26 from 11:59 p.m. ET on July 24.

Tendered notes my no longer be withdrawn as of the original early tender deadline.

The issuer is also soliciting consents to amend the notes to eliminate most of the restrictive covenants and some events of default and to release the collateral securing the notes.

Holders who tender must provide consents.

The total purchase price for each $1,000 principal amount will be $1,079.60 for the 10% notes and $1,030.00 for the 9 1/8% notes and 7¼% notes.

The total amount includes an early tender payment of $50.00 per $1,000 of notes tendered by the early tender deadline.

The issuer will also pay accrued interest up to but excluding the payment date.

The tender offers and consent solicitations are being made independently of each other and are not contingent on the others.

The tender offers do require financing with enough proceeds to fund the offers and the receipt of the required consents.

K. Hovnanian plans to price up to $840 million of senior secured notes due 2022 and 2024 in a private placement, with proceeds slated to fund the tender offers, the release noted.

The dealer managers are Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-2476), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424). The information agent is Global Bondholder Services (866 470-4300 or 212 430-3774).

Hovnanian Enterprises is a homebuilder based in Red Bank, N.J.

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