Hovnanian talks $150 million notes at 12¾% area yield, 2-3 points OID

By Paul A. Harris

Portland, Ore., Feb. 2 - K. Hovnanian Enterprises, Inc. talked its $150 million offering of non-callable 4.75-year senior notes (Caa2) with a 12¾% area yield, including 2 points to 3 points of original issue discount, an informed source said on Wednesday.

The books close at 3 p.m. ET on Thursday. Pricing is expected on Thursday afternoon or Friday morning.

Credit Suisse Securities, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint bookrunners for the public offering of notes.

The deal features a three-year 35% equity clawback and 101% poison put.

The Red Bank, N.J.-based homebuilder plans to use the proceeds to refinance existing notes due 2012 and 2013.

The company is also in the market with a concurrent offering of $125 million of equity and equity-linked securities.

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