K. Hovnanian Enterprises, Inc. Announces Expiration of Tender Offer and Related Consent Solicitation and Intended Redemption ...
September 07 2016 - 4:27PM
Hovnanian Enterprises, Inc. (NYSE:HOV) (the “Company”) announced
today that its wholly-owned subsidiary’s, K. Hovnanian Enterprises,
Inc. (“K. Hovnanian”), previously announced tender offer (the
“Tender Offer”) to purchase for cash any and all of its 8.625%
Senior Notes due 2017 (the “Notes”) and related solicitation of
consents (the “Consent Solicitation” and together with the “Tender
Offer”, the “Tender Offer and Consent Solicitation”) expired today
at 8:30 a.m., New York City time. Notes tendered in the Tender
Offer were less than 90% of the aggregate outstanding principal
amount of Notes on July 29, 2016 (the “Minimum Participation
Amount”), which was a condition to the Tender Offer and Consent
Solicitation.
As a result, K. Hovnanian will not accept for purchase or pay
for any Notes tendered pursuant to the Tender Offer and the
proposed amendments to the indenture under which the Notes were
issued (the “Notes Indenture”) that were the subject of the Consent
Solicitation will not be effected. K. Hovnanian has instructed the
depositary and information agent to promptly return all Notes
previously tendered to the tendering holders.
Concurrently with the launch of the Tender Offer and Consent
Solicitation, the Company and K. Hovnanian entered into financing
commitments (collectively, the “Financings”) with affiliates of a
certain investment manager. K. Hovnanian intends to use a portion
of the net cash proceeds of the Financings to call the Notes for
redemption at the closing of the Financings, which is expected to
occur on September 8, 2016. The Notes will be redeemed for cash at
a price equal to 100% of the principal amount of the Notes plus a
make-whole payment together with accrued and unpaid interest on the
Notes up to, but excluding, the redemption date (the “Redemption
Price”). K. Hovnanian expects to deposit funds sufficient to pay
the Redemption Price and to satisfy and discharge the Notes
Indenture on the closing date of the Financings. Upon satisfaction
and discharge of the Notes Indenture, the restrictive covenants and
events of default contained therein will cease to have effect. The
aggregate outstanding principal amount of the Notes is
$121,043,000.
This press release is neither an offer to purchase or sell nor a
solicitation of an offer to sell or buy the Notes or any other
securities of the Company, including the securities to be issued in
the Financings. The securities to be issued in the Financings have
not been and will not be registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities
laws and may not be offered or sold within the United States or to
U.S. persons, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws.
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, Maryland, New
Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia,
Washington, D.C. and West Virginia. The Company’s homes are
marketed and sold under the trade names K. Hovnanian® Homes,
Brighton Homes® and Parkwood Builders. As the developer of K.
Hovnanian’s® Four Seasons communities, the Company is also one of
the nation’s largest builders of active lifestyle communities.
Forward-Looking Statements All statements in
this press release that are not historical facts should be
considered as “Forward-Looking Statements”. 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. Although we believe that our plans, intentions and
expectations reflected in, or suggested by, such forward-looking
statements are reasonable, we can give no assurance that such
plans, intentions or expectations will be achieved. By their
nature, forward-looking statements: (i) speak only as of the date
they are made, (ii) are not guarantees of future performance or
results and (iii) are subject to risks, uncertainties and
assumptions that are difficult to predict or quantify. Therefore,
actual results could differ materially and adversely from those
forward-looking statements as a result of a variety of factors.
Such risks, uncertainties and other factors include, but are not
limited to, (1) changes in general and local economic, industry and
business conditions and impacts of the sustained homebuilding
downturn; (2) adverse weather and other environmental conditions
and natural disasters; (3) levels of indebtedness and restrictions
on the Company’s operations and activities imposed by the
agreements governing the Company’s outstanding indebtedness; (4)
the Company's sources of liquidity; (5) changes in credit ratings;
(6) changes in market conditions and seasonality of the Company’s
business; (7) the availability and cost of suitable land and
improved lots; (8) shortages in, and price fluctuations of, raw
materials and labor; (9) regional and local economic factors,
including dependency on certain sectors of the economy, and
employment levels affecting home prices and sales activity in the
markets where the Company builds homes; (10) fluctuations in
interest rates and the availability of mortgage financing; (11)
changes in tax laws affecting the after-tax costs of owning a home;
(12) operations through joint ventures with third parties; (13)
government regulation, including regulations concerning development
of land, the home building, sales and customer financing processes,
tax laws and the environment; (14) product liability litigation,
warranty claims and claims made by mortgage investors; (15) levels
of competition; (16) availability and terms of financing to the
Company; (17) successful identification and integration of
acquisitions; (18) significant influence of the Company’s
controlling stockholders; (19) availability of net operating loss
carryforwards; (20) utility shortages and outages or rate
fluctuations; (21) geopolitical risks, terrorist acts and other
acts of war; (22) increases in cancellations of agreements of sale;
(23) loss of key management personnel or failure to attract
qualified personnel; (24) information technology failures and data
security breaches; (25) legal claims brought against us and not
resolved in our favor; and (26) certain risks, uncertainties and
other factors described in detail in the Company’s Annual Report on
Form 10-K for the fiscal year ended October 31, 2015 and subsequent
filings with the Securities and Exchange Commission. Except as
otherwise required by applicable securities laws, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
changed circumstances or any other reason.
Contact:
J. Larry Sorsby
Executive Vice President & CFO
732-747-7800
Jeffrey T. O’Keefe
Vice President of Investor Relations
732-747-7800
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