Hovnanian Enterprises, Inc., Red Bank , N.J. (NYSE:HOV) announced Tuesday that its wholly owned subsidiary, K. Hovnanian Enterprises, Inc. plans to issue an aggregate principal amount of up to $840,000,000 of senior secured notes with maturities in 2022 and 2024 in a private placement.
K. Hovnanian intends to use the net proceeds from the offering to fund its previously announced offers to purchase any and all of its $75 million outstanding 10.000% Senior Secured Second Lien Notes due 2018, $145 million outstanding 9.125% Senior Secured Second Lien Notes due 2020 and $577 million outstanding 7.250% Senior Secured First Lien Notes due 2020 and/or to fund the redemption of all Existing Secured Notes that have not been accepted and paid for in the tender offers.
The Notes will be guaranteed by the Company and substantially all of its subsidiaries. The Notes and the guarantees thereof will be secured by liens on substantially all the assets of K. Hovnanian and the guarantors, subject to permitted liens and certain exceptions. The liens securing the Notes will rank junior to the liens securing K. Hovnanian’s $75.0 million senior secured term loan facility and any other future secured obligations that are senior in priority with respect to the assets securing the Notes.
