By Paul A. Harris
St. Louis, Feb. 22 - K. Hovnanian Enterprises, Inc. priced an upsized $300 million offering of 10-year senior notes (Ba1/BB) at par to yield 7½% in a quick-to-market Wednesday transaction, according to an informed source.
The yield came at a 297 basis points spread to Treasuries versus the Treasuries plus 300 basis point price talk.
The notes are non-callable.
Credit Suisse, Citigroup, Wachovia Securities and UBS Investment Bank ran the books for the notes, which have been registered with the Securities and Exchange Commission. Banc of America Securities, JP Morgan, KeyBanc Capital Markets, RBS Greenwich Capital, BNP Paribas, Calyon Securities and Piper Jaffray were the co-managers.
Proceeds will be used to repay the company's revolver which is used for general corporate purposes, including acquisitions.
The issue was upsized from $250 million.
The notes are guaranteed by the issuer's parent company, Hovnanian Enterprises, Inc., a Red Bank, N.J., residential home builder.
| Issuer: | K. Hovnanian Enterprises, Inc.
|
| Amount: | $300 million (increased from $250 million)
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| Maturity: | May 15, 2016
|
| Security description: | Senior notes
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| Bookrunners: | Credit Suisse, Citigroup, Wachovia Securities, UBS Investment Bank
|
| Coupon: | 7½%
|
| Price: | Par
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| Yield: | 7½%
|
| Spread: | 297 basis points
|
| Call protection: | Non-callable for life
|
| Trade date: | Feb. 22
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| Settlement date: | Feb. 27
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB
|
| Distribution: | SEC Registered
|
| Price talk: | Treasuries plus 300 bps area
|
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