Hovnanian exchanges $163 million term loans for new 1.75-lien loans

By Sarah Lizee

Olympia, Wash., Dec. 11 – Hovnanian Enterprises, Inc. wholly owned subsidiary K. Hovnanian Enterprises, Inc. entered into a 1.75-lien credit agreement providing for $81,498,000 of senior secured 1.75-lien term loans that were borrowed by K. Hovnanian in exchange for $162,996,000 of its senior unsecured term loans due Feb. 1, 2027, according to an 8-K filing with the Securities and Exchange Commission.

The 1.75-lien term loans bear interest at a rate equal to 10% per annum and will mature on Jan. 31, 2028.

As previously reported, the company had announced that it expected to exchange some of its outstanding unsecured debt for up to $81,498,000 of debt that is secured on a pari passu basis with new 2025 notes that were issued in exchange for old notes due 2022 and 2024. The amount is equal to the exchange offer cap less the amount of new 2025 notes issued in the exchange offers.

Wilmington Trust, NA is the administrative agent.

Hovnanian is a Matawan, N.J., homebuilder.

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