Moody’s downgrades Hovnanian

Moody’s Investors Service said it downgraded Hovnanian Enterprises, Inc.’s corporate family rating to Caa2 from Caa1, probability of default rating to Caa2-PD/LD from Caa1-PD and ratings on K. Hovnanian Enterprises, Inc.’s second lien senior secured notes to Caa3 from Caa2.

Moody’s affirmed the Caa3 ratings on the company’s senior unsecured debt and the Ca rating on its preferred stock.

“The rating action was prompted by a series of refinancing transactions completed and contemplated by Hovnanian that Moody’s deems to be distressed exchanges. Moody’s considers these transactions as events of default, which is reflected in the probability of default rating of Caa2-PD/LD. As a result of the exchanges, in Moody’s view, certain of the company’s creditors are or will be in a less advantaged position in terms of priority of payment, coupon or maturity. The downgrade of the corporate family rating reflects Moody’s view that given the highly levered capital structure the likelihood of further restructuring and distressed exchange transactions is high,” said Moody’s in a press release.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.