New Issue: Hovnanian prices $600 million 11½% five-year secured notes at 99.064 to yield 11¾%

By Paul A. Harris

St. Louis, May 16 - Hovnanian Enterprises, Inc. priced a $600 million issue of 11½% five-year senior secured second-lien notes (Ba3/B+/) at 99.064 to yield 11¾% on Friday, according to an informed source.

The yield came in line with "high elevens" price talk, the source added. The order book was six-times oversubscribed.

Credit Suisse led the quick-to-market Rule 144A deal. Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wachovia Securities were joint bookrunners.

The Red Bank, N.J.-based homebuilder will use the proceeds to pay down its revolving credit facility and for general corporate purposes.

Issuer:	Hovnanian Enterprises, Inc.
Amount:	$600 million
Maturity:	May 1, 2013
Security description:	Senior secured second-lien notes
Lead bookrunner:	Credit Suisse
Joint bookrunners:	Banc of America Securities LLC, J.P. Morgan Securities Inc., Wachovia Securities
Co-managers:	Citigroup, PNC, RBS Greenwich Capital
Coupon:	11½%
Price:	99.064
Yield:	11¾%
Spread:	868 bps
Call protection:	Callable on Nov. 1, 2010 at 102
Equity clawback:	Until May 1, 2011 for 35% at 111.5
Trade date:	May 16
Settlement date:	May 27
Ratings:	Moody's: Ba3
	Standard & Poor's: B+
Distribution:	Rule 144A with registration rights
Price talk:	High 11% range

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