Hovnanian $250 million two-tranche deal to price Tuesday

By Paul A. Harris

St. Louis, Mo., March 18 - K. Hovnanian Enterprises, Inc. is scheduled to price a two-tranche drive-by offering totaling $250 million Tuesday morning, according to a syndicate source.

The deal is comprised of $100 million of senior notes due 2012 (anticipated ratings Ba3/BB-), non-callable for five years, and $150 million of senior subordinated notes due 2012 (anticipated ratings B2/B), also non-callable for five years, according to a syndicate source. Both tranches will contain equity clawbacks, according to the source.

Salomon Smith Barney, Credit Suisse First Boston and Banc of America Securities are joint bookrunners.

Proceeds from the Rule 144A deal will be used to repay debt.

Price talk on the senior notes is 8 1/8%. And on the senior subordinated notes price talk is 8 7/8%-9%.

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