Hovnanian extends tender offer for 10 5/8% notes, gets wanted consents

By Angela McDaniels

Tacoma, Wash., Oct. 2 - Hovnanian Enterprises, Inc. subsidiary K. Hovnanian Enterprises, Inc. announced the early results of the tender offer and consent solicitation for its 10 5/8% senior secured notes due 2016, extended the expiration of the offer and announced plans for a redemption.

Holders had tendered $637.2 million principal amount, or 80%, of the 10 5/8% notes as of 5 p.m. ET on Oct. 1, according to a company news release.

The tender offer began on Sept. 18. The early tender deadline was 5 p.m. ET on Oct. 1, and the expiration has been extended to 5 p.m. ET on Nov. 2 from midnight ET on Oct. 16.

The company is soliciting consents to eliminate most of the restrictive covenants and some of the events of default contained in the indenture governing the notes. The consents received so far are enough to approve the proposed amendments.

The company will pay $1,085 per $1,000 principal amount of notes. This includes an early tender payment of $30 for each note tendered by the early tender deadline.

Holders will also receive accrued interest up to but excluding the applicable payment date.

The company has decided that Oct. 2 is the payment date for notes tendered by the early tender deadline.

The company plans to redeem on Nov. 1 all notes that were not tendered as of the early tender deadline and to satisfy and discharge its obligations under the indenture and the related security documents. Upon the satisfaction and discharge of the indenture, all of the collateral securing the notes will be released, and any restrictive covenants and some events of default contained in the indenture will cease to have effect.

The tender offer is subject to financing.

The dealer managers and solicitation agents are Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745) and Credit Suisse Securities (USA) LLC (212 538-2147 or 800 820-1653). The information agent is Global Bondholder Services Corp. (866 470-4200 or, for banks and brokers, 212 430-3774).

Hovnanian is a homebuilder based in Red Bank, N.J.

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